WASHINGTON, D.C. – The archery industry’s efforts to make foreign arrow manufacturers pay the same 12 percent federal excise tax on their products that domestic manufacturers have been paying moved one step closer to becoming law after the U.S. Senate last week passed bipartisan legislation that included the provision.

The provision to close the arrow-manufacturing tax loophole is part of the Senate’s bill that includes $420 billion in tax cuts and $70 billion in tax increases. Earlier, the House passed a $350 billion tax cut that is different from the Senate bill. Although the House of Representatives has previously voted in favor of the archery provision, it was not included in this particular bill. The House and Senate leaders will meet soon to reconcile differences between their two bills. President Bush and the Senate want to finish the work this week, but it could last longer.

The archery provision also removes the 11 percent federal excise tax on bows with draw weights less than 30 pounds. Because these weights are found mainly in beginner bows, and the industry is trying to reduce equipment costs for beginners, it desires the same tax break now afforded the manufacturers of BB guns, pellet rifles and other air guns designed for entry-level shooting.

In the Senate bill, the archery rider is included in a group of small provisions known as “member items,” which are paid by the tax-increase package. These items are generally small, specific provisions, such as the archery industry’s provision. This provision merely clarifies the intent of the federal archery excise tax by closing the tax loophole.

Observers expect a battle between House and Senate leaders over the two bills, with the House insisting the Senate’s package of tax increases be deleted. If any member items survive, they would likely be small-ticket items like the archery provision, which could be grouped under “administrative and simplification provisions.”

The archery provision was first introduced in early March by Congressman Paul Ryan, R-Wis., as part of the Tax Relief, Simplification and Equity Act of 2003, H.R. 1308. The House passed the bill by a unanimous voice vote in late March.

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 the current tax law hurts 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. Meanwhile, money paid to the country’s conservation and game-management programs is being lost because of foreign manufacturers taking advantage of the loophole.