Liability Concern?

JD 9116 · November 07, 2011, 09:16:00 PM

I was hoping maybe someone out there would be willing to give me some pointers. I have been making bows for myself as a hobby. Well, now the wife is tired of the walls being covered and says I should sell some. I have had some people want to buy some that I have made and have had some want me to make them one. I have been leary of doing this because I do not really know how to begin?

My biggest concern is the liability issue. Is a waiver sufficient or should I have liability insurance? If so, who would I contact?

I know there is a 15% manufacturers tax but is there more that I am not aware of?

This is a hobby and not a job so, what would you suggest I do if I want to make several bows a year to sell?

Any suggestions or information relating to this would be greatly appreciated.

Mt. Clemens Bowyer · November 08, 2011, 09:46:00 AM

Hi

I have built 4 laminated recurve bows myself, for family and friends at this point in time. And, I need to make more for my relatives, before I make any to sell. I was thinking myself concerning the liability involved in selling them, and the tax implications that go with it. It occurred to me that a good place to get information might be at your local flea markets. Talk to the management. Good luck. John

Nim-rod · November 08, 2011, 10:29:00 AM

I'm not so sure selling some of your own property falls in the category of "manufacturers tax" or under any liability issues. Unless of course you are indeed a bow making buisiness and do it for a living. Kinda like selling a few chairs on E-Bay or having a garage sale. Maybe sell it with proper stringing instructions and care and call it good. I've never sold any but thought about it. I'm not sure if my reasoning is correct on this but I think the theory is pretty sound.

monterey · November 08, 2011, 01:15:00 PM

There is the Pittman Robertson tax to be considered. I'm not sure how the tax is applied, but I did find that a friend who had a shop got caught up in paying a buunch of PR tax on arrows that he assembled in his shop and then sold.

Some of the pro bowyers here should understand how it works.

On the liability insurance, I'd think you should have a liability policy if you are formally making bows for re-sale. If you are simply selling off a few of your own used items, you could still be hit with a liability suit. This is America, anybody can sue anybody for anything! :eek:

If you own your own home, you have a personal liability coverage included in your homeowners policy. You could have coverage there. But, check with your insurance company for specifics.

John Scifres · November 08, 2011, 05:34:00 PM

You can do a search on the excise tax on the IRS Site. It's a pretty straightforward 11% tax on most outdoor sporting goods, with a few exceptions, that is used for conservation. All adult bows are covered. This is taken off the sale price and can't be added like a sales tax.

Liability is a problem for any small business. It's what keeps me from making bows for sale.

William F. Adams · November 08, 2011, 05:49:00 PM

The excise tax is only on bows of 30 lbs. draw weight AIUI:

http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._4161._Imposition_of_tax

(1) Bows.--
(A) In general.--There is hereby imposed on the sale by the manufacturer, producer, or importer of any bow which has a peak draw weight of 30 pounds or more, a tax equal to 11 percent of the price for which so sold.

Bradford · November 08, 2011, 05:56:00 PM

If you are selling off your "used" goods.. don't worry.. no ones coming after you.

If you start building to sell then get everything in order. If you are only going to make 2 or 3 a year to sell.. then have them sign a waiver that the bow is being sold as a peice of art for decoration.. or as a novalty gift.. have them sign that and you should be fine.

My 2 cents. If you are going into full production, then get all your ducks in a row!

JD 9116 · November 09, 2011, 06:32:00 AM

Would it be better to speak with an attorney first on what I would be liable for and what waivers may cover? Or,should I try to find a company that sells the liability insurance and speak with them? Thanks

monterey · November 09, 2011, 04:01:00 PM

You might talk to an attorney about it. Remember, attorneys have areas of specialization. You don't want to talk to the attorney who represented you in your last divorce or bank robbery defense. Find a guy who specializes in the field. If he really knows his stuff, he will be able to suggest some liability coverage carriers.

I'm with others on the matter of disposing of some of your own used stuff. Should not need to jump through any hoops.

LittleBen · November 10, 2011, 08:23:00 AM

This all sounds like the last things guy like us should need to think about. Just sad to see fear of litigation stopping the spread of handmade traditional equipment and of our hobby. At the same time I understand the concern b/c if can be backwards in this world. I just sold one to a friend and we just discussed proper care and maintenance and SAFETY. Its all wood btw nog glass.

JD 9116 · November 11, 2011, 07:45:00 AM

I agree! I enjoy this so much and it would be nice to make a little back on my expenses. This is an area of this hobby which I never thought I would be checking into. It seems that unless you are a large scale business operation it is nearly impossible to "tinker" with this as a side hobby/income. Is there anyone who may know of any attorneys or insurance agents who specialize in what I am checking into in the northern Indiana area? I may also check at the trad show in southern Michigan with some of the people there to see if they have any ideas? I appreciate everyone's input!

JamesV · November 12, 2011, 07:35:00 AM

There was a thread sometime back where some of the sponsors, bow builders offered advice and named a few Insurance Carriers. Might do a search

Eric Krewson · November 12, 2011, 08:35:00 AM

I sold bows in the past,tried not to think about the liability issue but is is always the 900lb gorilla in the closet waiting to get out.

I felt I was pressing my luck buy not having liability insurance and quit selling bows. I still donate them to charitable causes as fund raisers and will take my chances rather than give up the part of me that needs to share my craft for the good of others.

Forming an LLC would be your best bet to protect your personal assets if you decide to sell big time.

LittleBen · November 12, 2011, 10:42:00 PM

I liked the comment about selling them as art or display items. "replicas" haha. That way theres no more risk than comes from dropping a statue on your foot.

Big-un08 · November 13, 2011, 01:31:00 AM

Check this thread out. I think you'll find answers to most of the questions that you have.

http://tradgang.com/noncgi/ultimatebb.php?ubb=get_topic;f=1;t=060858;p=1

JD 9116 · November 13, 2011, 09:26:00 PM

Thanks for all the input and the thread it really helps in the direction I need to look!

George Tsoukalas · November 15, 2011, 09:05:00 AM

Talk to a lawyer about liability. Jawge