Excise Tax Snapshot – First Quarter FY2021

Excise Tax Snapshot – First Quarter FY2021

The Wildlife Management Institute (supported by a Multi-State Conservation Grant) provides you with this quarterly snapshot of the excise tax collections to help you understand the health of the American System of Conservation Funding. This system of funding was established in the 1930s and expanded and perfected over the next 40+ years. This reliable source of annual funding for state fish and wildlife agencies represents a unique partnership between the agencies and the hunting, shooting sports, angling, and boating industries. In rough national numbers, these excise tax deposits made by the partner industries represent about half of the state fish and wildlife agencies’ annual budget. That said, there are a number of state fish and wildlife agencies that enjoy other sources of funding (i.e., state level appropriations, specific sales tax additions, lottery funds, etc.). Regardless of other funding sources, the funding generated and made available to state wildlife agencies is substantial. Therefore, it is imperative to conservation that agencies (from the commissioners down to the field biologists) understand the industry trends and work with these industries to ensure a strong income flow going forward.

Fishing rods and reels

The following numbers cover the first quarter of the 2021 federal fiscal year (October 1, 2020 thru December 31, 2020) and compares those numbers to the collections for the first quarter of federal fiscal year 2020. These numbers are provided by the U.S. Fish and Wildlife Service that gets them directly from the two collection agencies (the Internal Revenue Service and the Tax and Trade Bureau).

As you review these numbers, it is important to recognize that COVID-19 is still impacting these trends. In previous stories, we shared how the excise tax reporting and paying schedules were “bent” a bit to accommodate taxpayer hardships during the COVID crisis. Some of the increases that we have seen in this past quarter may be in response to the industry catching up on their filing.

The collections for the Sport Fish Restoration Account continued to show the strength in the industry with an overall increase in collections of 5%. The big increases came from sport fishing equipment (up 11%) and customs duty collections (up 48%). The big contributors (motorboat and small engine fuel taxes) were stable with a very slight increase (up 1%). There was a hefty loss in interest collected on funds in the Sport Fish Account (down 24%), which is likely due indirectly to the delayed reporting/paying of excise taxes due to COVID – money was going out but the funds being contributed were dragging. There was also a loss of 11% in collections from tackle boxes and this follows a 54% decrease in that category over the last fiscal year. All told, these numbers continue to suggest that fishing is being seen as a good alternative activity for family recreation during the pandemic. Hopefully, this trend will continue into 2021.

The collections in the Wildlife Restoration Account continued to show strength in the first quarter of this fiscal year. When compared to the first quarter of the 2020 fiscal year, the Wildlife Restoration Account is showing a 55% increase in the first quarter of fiscal year 2021. Like we saw last year, the big increases were in the pistols/revolvers and ammunition categories with both showing a 61% increase over the same period last year. Firearms also came on strong with a 46% increase. This quarter, the archery industry also had a strong showing with a whopping 105% increase in excise tax collections for arrows and a 16% increase in archery equipment excise tax collections.

Following is a closer look at the numbers.

The Sportfish Restoration Account

The Trends:

Here are the comparisons of the collections for the first quarter of FY 2020 and FY 2021.

Trends Between Last and Current Fiscal Years      
Product FY 2020 (thru Qtr 1) FY 2021 (thru Qtr 1) % Change
Motorboat Fuel Tax $46,079,000 $46,394,000 1%
Small Engine Fuel Tax $26,675,000 $25,833,000 1%
Interest $11,220,781 $8,567,453 -24%
Customs Duties $13,550,131 $20,056,597 48%
Fishing Equipment $18,798,000 $20,916,000 11%
Electronic Boat Motors $1,106,000 $1,149,000 4%
Fishing Tackle Boxes $282,000 $236,000 -16%
Fishing Rods and Poles $4,004,000 $4,010,000 0%
Total Sportfish & Boating Restoration $120,714,912 $127,162,050 5%

The Funding Sources:

It is always important to understand where these numbers come from, how they relate to past numbers and how the individual funding sources relate to the overall funding available. The following pie-chart shows the importance of funding sources that are not directly related to fishing equipment (motorboat and small engine fuel taxes; customs duties; interest) to the support of state agencies’ aquatic conservation efforts (79.3% of the total funding).

Sport Fish Restoration Funding Graph

Wildlife Restoration Account

The Trends:

Here are the comparisons of the collections for the first quarter of FY 2020 and FY 2021.

Trends Between Last and Current Fiscal Years      
Product FY 2020 (thru Qtr 1) FY 2021 (thru Qtr 1) % Change
Pistols & Revolvers $51,369,469 $82,586,519 61%
Firearms $48,697,925 $71,327,389 46%
Shells & Cartridges $50,156,909 $80,534,361 61%
Archery Equipment $9,486,846 $11,044,733 16%
Arrow Shafts $2,503,457 $5,137,562 105%
Total Wildlife Restoration $162,214,606 $250,630,564 55%

The Funding Sources:

An important piece of information that we must not overlook in this collection data is the source of the funds. Roughly speaking, about 6.5% of the collections are coming from archery. Pistols & revolvers contributed roughly 33%; firearms are adding almost 29%; and 32.1% is coming from ammunition sales. Those that watch these quarterly summaries closely may have noted that the percentage from pistols and ammunition are creeping up. This is an important bit of information when you think about how important recreational shooting ranges are in the overall model for conservation funding. Here is a pie chart that shows this a bit more dramatically:

Wildlife Restoration Funding Q1 2021 PIe Chart


Both the Sport Fish and Wildlife numbers are looking good for this first quarter of the Federal Fiscal Year. This is great news for state fish and wildlife agencies and let’s hope the upward trend continues.

Stay strong and stay healthy.

Photo Credit
Steve Sawyer, Flickr
February 16, 2021