Federal Hunting and Fishing Excise Taxes Create Enormous 1,000-2,000% Annual Return on Investment to Outdoor Industry
FERNANDINA BEACH, Fla. — An analysis conducted by Southwick Associates and Andrew Loftus Consulting for the Association of Fish and Wildlife Agencies found that federal excise taxes collected on the sale of hunting and shooting equipment represented an approximate 1,100 percent annual return on investment (ROI) to manufacturers between 1970 to 2006 and taxes collected on sport fishing equipment generated a striking annual ROI of 2,157 percent between 1955 and 2006.
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The ROIs in the new report "The Benefits to Business from Hunting and Fishing Excise Taxes" were determined by comparing the amount of excise taxes collected annually to the amount of purchases made annually by sportsmen during the respective timeframes. By law, the excise taxes only can be used to maintain fish and wildlife populations, provide public access and support programs that directly benefit hunters, shooting sports enthusiasts and anglers.
On average, the hunting- and shooting sports-related industry paid $251 million in excise taxes, but made $3.1 billion in revenue through sportsmen purchases each year from 1970 to 2006. From 1955 to 2006, the sport fishing industry on average contributed $110 million in annual tax payments/import duties, but generated $2.3 billion in annual taxable equipment sales.
"How many tax models in our country today can show an $11 to $21 return to the company on every dollar spent," said Congressional Sportsmen's Caucus Co-Chair U.S. Congressman Jeff Miller, R-Fla. "This is one of the most impressive examples of how an American industry can profit and bolster the economy while restoring and improving our nation’s cherished natural resources."
The excise taxes are collected quarterly from outdoor industry manufacturers and importers for sales on items such as fishing lures, rods and reels, firearms, ammunition and other products. Hunting-, shooting- and fishing-related taxes are collected under the Federal Aid in Wildlife Restoration Act and Sport Fish Restoration Act respectively.
Funding is then apportioned to state and territorial fish and wildlife agencies based on land area and state fishing and hunting license sales. Agencies combine these funds with the license revenues to conserve fish and wildlife and their habitats and create recreational and educational opportunities. In 2009 alone, more than $740 million was made available to states and territories in addition to the nearly $1.4 billion total paid by hunters and anglers in license fees.
"Outdoor activities like hunting and fishing have shaped who we are as Americans and they are important traditions that must be preserved. In order to do so, conservation and wildlife management must be among our top priorities as sportsmen and women," said Congressional Sportsmen's Caucus Co-Chair U.S. Congressman Mike Ross, D-Ark. "The revenue from these excise taxes helps fund conservation and wildlife management efforts in a fiscally responsible way. Ultimately, the value and opportunities created by improved habitat and more robust fish and wildlife populations bring more sportsmen and women into the fold, which in turn spurs more revenue and keeps the cycle of investment strong."
"The conservation community has known for a long time that the excise taxes provide a vital funding source for state agencies and have enhanced fish and wildlife populations," said Rob Southwick, president of Southwick Associates. "This ROI study, for the first time, demonstrates the substantial bottom line financial benefit of these taxes back to those companies that write the checks."
According to the ROI study, outdoor industry excise taxes have helped to:
- Increase Atlantic striped bass populations by nearly 500 percent since 1982; leading to a 1,000 percent increase in the number of angler trips and generating more than $68 million on average per year in related fishing equipment sales.
- Improve fishing in the Great Lakes from nearly nonexistent in the 1950s to world class for salmon, trout, walleye and yellow perch; generating more than $2 billion in retail sales and supporting more than 58,000 jobs.
- Turn Wyoming into one of the top destinations for elk hunting with 23,000 harvested annually when in 1937 only a few hunts were permitted.
"Everyone who has a stake in hunting or fishing—from hunters and anglers who enjoy the resource to manufacturers who make the products—benefits," said Ron Regan, executive director of the Association of Fish and Wildlife Agencies. "State fish and wildlife agencies particularly benefit as these funds represent the single largest, dedicated funding source for science-based conservation programs."
The report concludes that a decrease or elimination of outdoor industry excise tax funding would reduce long-term investment into the foundation of the sport-fishing and hunting—fish and game populations, public access and recruitment of future customers. Such a circumstance would, in turn, cause a downward spiral in participation, which would further diminish consumer spending on the equipment produced by manufacturers.
"The Benefits to Business from Hunting and Fishing Excise Taxes" report along with full reports that include technical details, are available for free at www.SouthwickAssociates.com/excisetaxROI.