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TAXATION & (UNDER) REPRESENTATION

TAXATION & (UNDER) REPRESENTATION

If you buy a gun or a lure, an arrow or a fishing rod, you are helping fund wildlife management in America. Should other groups help shoulder the cost of outdoor recreation?

By Andrew McKean

I’m going to try to connect two seemingly disparate points on the map of outdoor recreation to make the case that the way we fund fish-and-wildlife management and public infrastructure needs, at a minimum, some tweaking, and over the long term, a major overhaul.

The first waypoint is this: 15. That’s the percentage of the American population that bought a fishing license last year. While the overall number of license-buying anglers is robust—it hit 49 million last year, the percentage of Americans that fishes is far less than it was 50 years ago, and the percentage of Americans who hunts—5 percent—is on pace to drop even further as Baby Boomers stop hunting ducks and deer.

The second waypoint is this: $2.78 billion. That’s the amount of 2018 sales that the co-op Recreational Equipment, Inc. (REI) reported in April. That’s 6 percent above 2017’s sales. The co-op, which trades in outdoor gear like backpacks and tents, also added 1 million members in 2018, boosting REI’s total membership to more than 18 million.

Tax-paying users raise a legitimate question: Why should only bow and gun shooters and fly- and lure-casters fund the vital work of wildlife management in America?

So, what do these two plot points (and trend lines) have in common? Both populations described by those numbers identify themselves by their outdoors experiences, anglers behind a rod and reel and hikers beneath a backpack or watersporters atop a standup paddle board. The two groups use and value the same landscapes, and especially cherish accessible public land and water. But that’s largely where the commonalities end. Anglers are required to pay much more, in the form of mandatory licenses, than hikers are to participate in and enhance their outdoors experiences.

But the brightest line that separates the two populations is the special excise tax that anglers pay on the outdoor gear they buy. Sport fishing equipment is taxed at 10 percent of the sales price. That’s for every rod, reel, hook, sinker, creel, landing net, and fishing vest sold. There’s an additional excise tax imposed on motorboat fuel. On the hunting side, the tax adds 11 percent to the purchase price of firearms, ammunition, and archery gear. It’s 10 percent on handguns.

Sport fishing equipment is taxed at 10 percent of the sales price. That’s for every rod, reel, hook, sinker, creel, landing net, and fishing vest sold and there’s an additional excise tax imposed on motorboat fuel.

Some folks call this the “critter tax,” and the total revenue these excise taxes generates isn’t insubstantial. On an annual basis, the tax on fishing gear raises hundreds of millions of dollars (in 2018, more than $350 million was apportioned to states; its rolling average is about $400 million annually), though the total fluctuates based on the strength of the overall economy and sportsmen’s spending habits. Whether you’re a Hillary-dreading AR impulse buyer, an ammunition hoarder, or a hopelessly addicted steelheader, your individual behavior influences national excise-tax receipts. The money is collected by the U.S. Treasury, but it’s not used to pay down the national debt or to fund Israeli missiles or humanitarian aid in Botswana.

Instead, it’s redistributed by the U.S. Fish & Wildlife Service to state and tribal wildlife agencies to be used to manage wildlife, buy habitat and other critical public lands, fund hunting-and-angling education courses, and help with specific wildlife-management needs that states can’t cover with license revenues alone.

How much excise tax do REI’s customers pay when they buy a mountain bike? None. How about someone who buys a tent or a backpack through Amazon? Zero.

REINVESTING IN OUTDOORS INFRASTRUCTURE

The Sport Fish Restoration funds, which is how this “fish tax” is formally known (the “deer” tax is called the Wildlife Restoration Fund), is the backbone of what we’ve come to call the North American system of wildlife management. The bulk of funds that go to pay for things like fisheries biologists’ salaries and game wardens’ pickups comes from hunting and fishing licenses that states collect from license buyers. But excise-tax funds, which are distributed to states based on population, geographic area, and the number of licensed hunters and anglers, are used for more enduring things like the purchase of wildlife-management areas and construction of shooting ranges. States are required to match these federal excise-tax funds in order to have some skin in the game and to ensure that federal funds are being spent on things that matter to hunters and anglers in that state.

A classic example of a “user-plays, user-pays” system, excise taxes have paid for property, like acquiring Oregon’s Summer Lake Wildlife Area and expanding the popular Lower Deschutes Wildlife Area. Funds have improved fisheries, by investing in hatcheries, fish bypass structures, and public fishing piers. They’ve helped pay for knowledge, like expanding our understanding the range and age structure of California’s pronghorn antelope herd. And they’ve helped pay for the future, through funding Hunter Education and Angler Education courses across the country.

The system works well as long as inputs keep pace with expenditures, but a growing number of conservationists are worried about long-term sustainability. That’s because the revenue side of the ledger shows some fragility. There’s a years-long decline in the number of license-buying hunters, and projections show a steepening decline over the next decade or two as hunters age out and aren’t being replaced by younger participants. Excise-tax receipts are distributed according to the number of licensed hunters and anglers in a state, and if those numbers shrink, so does the excise-tax revenue that’s funneled to that state.

Then there’s the volatility of the gun-and-ammo market. The bulk of excise-tax revenue in recent years has come from shooters, not strictly hunters. Think of all the firearms purchases that have been fueled by fears over future gun control. Think of the billions of rounds of ammunition that have been fired since the spike in popularity of the AR-platform rifle. What happens when the political or economic climate cools and we stop buying as many guns and shooting as many rounds? We’ve actually seen some indication of this. Some manufacturers and retailers call it the “Trump Slump,” slowing sales of guns over the last two years because the political climate doesn’t appear to be as antagonistic to gun ownership as it was during the last election cycle.

DOING MORE WITH LESS

Fish and wildlife managers who look ahead notice two troubling trends. The first is that state wildlife agencies are managing far more species than they used to. Even a decade ago, fish-and-game agencies were just that, responsible for managing mainly huntable and fishable species. But state agencies have been charged with managing songbirds, butterflies, freshwater mussels, and crickets. The money that you and I pay for our steelhead tags don’t go exclusively to managing steelhead, but rather all the various mandates that agencies serve. That means that license revenue doesn’t go as far as it once did, and because state agencies are loathe to ask legislatures to kick in general-fund revenue, it means that budgets must shrink or services must be cut.

The other trend is that as the percentage of the population that hunts and fishes declines, the percentage of users of state-agency resources who don’t buy deer and salmon tags increases. That wildlife management area that provides critical big-game winter range? It also has some killer mountain bike trails. That fishing access site that was purchased with a mix of fishing-license and excise-tax funds? It’s used by kayakers just as frequently as fly-fishers. But those users, who buy neither guns nor bows nor hunting and fishing licenses, are as free as any gun-buying, deer-licensed hunter to access the public property.

“No state agency I’m aware of requires you to show proof of purchase of a hunting or fishing license in order to access a property or facility that’s owned by the public and managed by the agency,” says Caleb Moore, resource manager for the Illinois Division of Natural Resources. “That would be un-American, even though those places are generally paid for by licensed hunters.”

BROADENING THE BASE

Even dedicated hunters don’t always contribute their share. Say you’re a hard-core backcountry elk hunter. Maybe the bow and arrows, or the rifle and shells you use, are taxed. But the camouflage you wear isn’t. Neither is the cow call you blow. Or the decoy you deploy. Or the estrus scent you spray. Or the binocular you use to see that distant bull.

Tax-paying users raise a legitimate question: Why should only bow and gun shooters and fly- and lure-casters fund the vital work of wildlife management in America? But attempts to broaden the categories of hunting gear that contribute to the critter tax have been defeated by manufacturers uninterested in raising the price of their goods in order to recoup the tax.

“If you expand the excise tax to cover things like tree stands and sporting optics, all you’re doing is getting the same users to pay more than they’re already paying,” says Ryan Bronson, vice-president for conservation for Vista Outdoor, the company that owns brands like Federal Ammunition, Savage firearms, and Primos game calls. In 2017, Vista’s 50 brands paid $87 million in federal excise taxes.

“If you are truly interested in broadening the base of funding,” says Bronson, “then you need to look outside the narrow world of hunting (fishing)-gear manufacturers to the larger pool of outdoor-gear manufacturers.”

That’s where REI’s record-setting sales comes in. America’s outdoor recreation industry is humming, as benchmarks like campground reservations and mountain-bike sales indicate. Is it time these non-hunting and fishing groups invest in our outdoor-recreation infrastructure, too? Is it time to impose a “backpack tax” similar to the “critter tax”?

Is it time to impose a “backpack tax” similar to the “critter tax”?

Outdoor retailers argue that they already pay their share by contributing sales-tax receipts that may not be earmarked for outdoor infrastructure but fund the wider array of community needs. They say that trying to define which of their gear is used exclusively for outdoor use would be a “logistical nightmare.” And they say that imposing a gear-specific excise tax lets lawmakers off the hook to more broadly fund outdoor recreation.

“We believe Congress must first meet its obligation to fund the land management agencies and fully fund the Land and Water Conservation Fund (LWCR),” says the Outdoor Industry Association in a statement. “Before seeking other revenue sources, Congress should first keep its original commitment to assign dollars to the designated public lands programs as promised.”

Earlier this year, Congress voted to permanently fund the LWCF. Later this year, lawmakers are expected to vote whether to fully fund the program. If that happens, will the OIA agree to “seek other revenue sources,” such as an excise tax? Don’t bank on it, says Bronson, who argues that the tax that has created so much outdoor opportunity over the past 80-some years needs a fix in order to be sustainable for the next generation of hunters anglers, and hikers.

“Rather than getting hunters and shooters to pay more,” he says, “we should look to broaden it so the hiker and birder at least pay something.”

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