September 2019 Edition | Volume 73, Issue 9
Published since 1946
Excise Tax Snapshot
As you know, one of the most important parts of managing your bank account is understanding the deposits into that account. 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 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 numbers, these excise tax deposits made by the partner industries represent about half of the state fish and wildlife agencies’ annual budget. 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.
The following numbers cover the first three quarters of the 2019 Federal fiscal year (October 1, 2018 thru June 30, 2019) and compare those numbers to the same period in fiscal year 2018.
For the Sport Fish Restoration Account, we are holding even with last year’s collections for the same period. If you recall our last Excise Tax Update, we were about 9% above the first half of 2018. However, collections dropped off over the last few months. Fuel related collections are about even with FY 2018 numbers and interest collections are up 9%. While we saw some strong performance for trolling motors and fishing rods, the excise taxes collected from fishing equipment and tackle boxes were significantly lower than for the same period in 2018.
The collections for the Wildlife Restoration account during the first three quarters of FY 2019 continue to slip and are now showing 7% reduction from the same period last year. You may recall that three months ago, we were down only 4%. The only bright spot was archery equipment which is up 5% over the same period in 2018. However, arrow shaft excise tax collections are down a whopping 24% from last year’s collections. Firearms and pistols are showing moderate reductions (3% and 4%, respectively). Ammunition is showing a much larger loss (15%) from the same period in 2018.
Following is a closer look at the numbers provided by the Fish and Wildlife Service, which gets them directly from the two collection agencies (the Internal Revenue Service and the Tax and Trade Bureau).
The Sport Fish Restoration Account
The Trends:
Here are the comparisons of the collections for FY 2018 and FY 2019
| Trends Between Last and Current Fiscal Years | |||
| Product | FY 2018 (thru 6/18) | FY 2019 (thru 6/19) | % Change |
| Motorboat Fuel Tax | $199,878,000 | $201,801,000 | 1% |
| Small Engine Fuel Tax | $87,131,000 | $87,131,000 | 0% |
| Interest | $18,005,506 | $19,541,606 | 9% |
| Customs Duties | $49,484,870 | $48,027,721 | -3% |
| Fishing Equipment | $84,850,722 | $76,017,566 | -10% |
| Electronic Boat Motors | $3,702,313 | $4,604,997 | 24% |
| Fishing Tackle Boxes | $1,715,845 | $985,407 | -43% |
| Fishing Rods and Poles | $15,079,179 | $20,552,438 | 36% |
| Total Sportfish & Boating Restoration | $459,847,435 | $458,661,735 | 0% |
The Funding Sources:
It is 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 provides a strong reference to how important the motorboat and small engine fuel taxes are to the support of state agencies' aquatic conservation efforts (63% of the total funding).
Wildlife Restoration Account
The Trends:
Here are the comparisons of the collections for FY 2018 and FY 2019.
| Trends Between Last and Current Fiscal Years | |||
| Product | FY 2018 (thru 6/18) | FY 2019 (thru 6/19) | % Change |
| Pistols & Revolvers | $150,715,984 | $144,376,476 | -4% |
| Firearms | $148,881,295 | $144,785,724 | -3% |
| Shells & Cartridges | $164,570,092 | $139,379,368 | -15% |
| Archery Equipment | $29,503,176 | $31,091,259 | 5% |
| Arrow Shafts | $7,825,175 | $5,936,902 | -24% |
| Total Wildlife Restoration | $501,495,722 | $465,569,729 | -7% |
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, less than 10% of the collections are coming from archery and around 30% each is coming from pistols, firearms, and ammunition. Here is a pie chart that shows this a bit more dramatically:
Summary:
There is not a lot of good in these numbers. Three months ago, we could at least rejoice that the fishing numbers were strong. Now those gains have slipped away. The wildlife numbers are still sending a strong signal that this foundational program of the American System of Conservation Funding is not healthy. There may be a number of reasons that we might point to but be careful not to fall into the trap of saying this is the fault of someone else. Yes, I’m sure global trade wars and the resulting tariffs are partially to blame, but I feel the more chronic problem rests with our inability to excite the public about hunting and fishing.
Also, let’s not forget the importance of recreational shooting in our wildlife numbers. If you consider the pie chart showing the origin of the Wildlife Restoration Account collections, you will see that firearms and ammunition support around 90% of the total Wildlife Restoration collections. Look closer – state wildlife agencies realize as much in excise tax collections on pistols and revolvers as from firearms (over $144 million so far this year). I doubt that many of those pistols and revolvers are being used to hunt. In fact, I suspect that most of the traditional firearms will never be carried into the field for hunting. In addition, I’ve heard from those in the ammunition industry that a conservative estimate would be that over 80% of the ammunition sold in the U.S. is not being used for hunting. We in the conservation community need to remember these numbers when we think about our customers and not forget the recreational shooter. Similarly, on the fishing side – don’t forget that over 60% of the Sport Fish Restoration collections come from gas taxes.
While hunters and anglers may be the ones buying the annual licenses, they do not represent the entirety of the American System of Conservation Funding.