WASHINGTON (March 20, 2003) – Foreign arrow manufacturers will soon have to pay the same 12 percent federal excise tax on their products that domestic manufacturers have been paying, after the U.S. House of Representatives passed bipartisan legislation Wednesday from Congressman Paul Ryan, R-Wis., to close the loophole that currently gives foreign manufacturers a competitive advantage.

Rep. Ryan’s provision also removes the 11 percent federal excise tax on bows with draw weights less than 30 pounds. Because these federal taxes are levied to support state hunting and wildlife programs under the Pittman-Robertson law, and beginner bows can’t be used for hunting, the current tax isn’t consistent with the spirit of Pittman-Robertson.

Ryan’s bill, first introduced in early March, was originally part of a larger tax bill – H.R. 878, the Armed Forces Tax Fairness Act. After House leaders removed this and all other add-on amendments from the act, Ryan reintroduced his bill earlier this week as part of the Tax Relief, Simplification and Equity Act of 2003, H.R. 1308. After debating the bill Wednesday morning, the House passed it on a unanimous voice vote. H.R. 1308 is expected to be included in President Bush’s economic growth package, which should be enacted in late spring or early summer. 

Ryan, who represents Wisconsin’s First District, is a member of the House Ways and Means Committee. He fought for this reform because he believes existing tax laws hurt domestic arrow makers. In effect, the law has been a tariff against U.S. arrow-makers, and puts them at a competitive disadvantage. As a result, some domestic producers relocated their businesses — and jobs — overseas, and others were considering that option. At the same time, money paid to the country’s conservation and game-management programs is lost. 

“This destructive loophole is relatively easy to fix, but in the meantime it is costing U.S. jobs,” Ryan said. “So I’m glad we could move forward quickly in the House to pass my legislation correcting this inequity. The federal government doesn’t really understand bowhunting, which is why the tax code has these sorts of glitches. As a bowhunter, I understand it, and I’m happy I could help advance a solution to this problem through my work on the Ways and Means Committee.” 

American sportsmen and women pay the Pittman-Robertson federal excise tax on sporting arms and ammunition to fund state wildlife agencies through a user-pay, user-benefit system. Unfortunately, the current tax on archery equipment unintentionally hurts manufacturers. Because the tax is imposed on arrow components rather than on assembled arrows, foreign manufacturers are importing assembled arrows into the United States without paying the 12 percent excise tax paid by domestic manufacturers. In addition, youth equipment not used for bowhunting is taxed to support game management.

Jay McAninch, CEO and president of the Archery Trade Association, applauded Ryan’s amendment. “Rep. Ryan has been fighting hard for bowhunters and American archery manufacturers,” McAninch said. “He has done more for us than anyone could have wished. He helped his colleagues in Congress understand why the current law is so hard on domestic arrow companies. We hope this action by the House is the end of the business advantages for foreign manufacturers. It will also provide a boost to the country’s hunting and wildlife-management programs.”

McAninch also praised the efforts of Rep. Mac Collins, R-Ga., in moving this reform forward. Collins is also a member of the House Ways and Means Committee.

Kevin Stay, president of Genesis Bows in Sparta, Wis., said the Act will be a boost to the industry’s efforts to promote recreational archery by removing the excise tax on low-poundage bows.

“Removing this tax will make it easier for more people to try archery because it helps us control the costs of entry-level bows,” Stay said. “The more people we can introduce to archery, the more people who will someday want to try bowhunting. When they take up bowhunting, their subsequent purchases will help increase the Pittman-Robertson fund over the long term.”

Ryan’s archery equipment provision includes these actions: 

** Closes the loophole that foreign arrow manufacturers currently exploit. Accomplishes this by placing a 12 percent excise tax on the sale by a manufacturer, producer or importer of assembled arrows. Retains the 12.4 percent tax on the sale by a manufacturer, producer or importer of shafts, points, nocks and vanes.

** Clarifies that broadheads are taxed at 11 percent, as an accessory. Currently, because of their misclassification, broadheads are taxed as a component at 12.4 percent.

** Lifts the current 11 percent tax on youth bows – bows with draw weights less than 30 pounds. These bows are not suitable for bowhunting, and those who purchase these nonhunting bows should not have to pay the user fee for wildlife and habitat-management programs. This is consistent with the purpose of the Pittman-Robertson law.