Publication 510 - Introductory Material


What's New

Medical device excise tax. The Affordable Care Act (the “Act”) (Public Law 111-148, amended by Public Law 111-152) imposes a 2.3% (.023) excise tax on the sale of certain medical devices by the manufacturer, producer, or importer of the device. The tax applies to sales of taxable medical devices after December 31, 2012. See Taxable Medical Devices in chapter 5, later.

Tax on seasonal flu vaccines. Sales of all vaccines against seasonal influenza are now subject to the section 4131 excise tax at the existing rate of $.75 per dose of taxable vaccine. Previously, only trivalent influenza vaccines were subject to this tax. See Vaccines in chapter 5, later.

Patient-centered outcomes research fee. The Act imposes a fee on issuers of specified health insurance policies (section 4375) and plan sponsors of applicable self-insured health plans (section 4576) to help fund the Patient-Centered Outcomes Research Institute. The fee, required to be reported annually on the 2nd quarter Form 720 and paid by its due date, July 31st, is based on the average number of lives covered under the policy or plan. The fee applies to policy or plan years ending on or after October 1, 2012. See chapter 11, later.

Extension of fuel tax credits. The following section 6426 credits, previously expired on December 31, 2011, are retroactively extended.

  • Biodiesel or renewable diesel mixture credit.

  • Alternative fuel credit.

  • Alternative fuel mixture credit.

See Notice 2013–26 (fuel tax credits) on page 984 of I.R.B. 2013–18 at www.irs.gov/pub/irs-irbs/irb13-18.pdf; also see chapter 2, later.

Alternative fuel mixture credit can be claimed on Schedule C (Form 720) only. For alternative fuel mixtures produced after December 31, 2011, the section 6426 alternative fuel mixture credit can be claimed on Schedule C (Form 720) only, not on Form 4136, Credit for Federal Tax Paid on Fuels, or Schedule 3 (Form 8849), Claim for Refund of Excise Taxes, and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel, and kerosene. See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit in chapter 2, later.

Expiration of alcohol fuel mixture credit. The section 6426 alcohol fuel mixture credit expired after December 31, 2011.

Expiration of alcohol fuels credits. The section 40 alcohol, alcohol mixture, and small ethanol producer credits expired after December 31, 2011.

Second generation biofuel producer credit and excise tax. The section 40 cellulosic biofuel producer credit was retroactively extended to include fuel sold or used through January 2, 2013. After January 2, 2013, cellulosic biofuel is renamed second generation biofuel, which adds algae-based fuel. The second generation biofuel producer credit is for fuel sold or used after January 2, 2013, and before January 1, 2014. You are liable for an excise tax on each gallon of cellulosic or second generation biofuel at the rate you used to figure the credit if you do not use the fuel for the purposes described under Qualified Cellulosic Biofuel Production or Qualified Second Generation Biofuel Production, later. Report the tax on Form 720. See Cellulosic or Second Generation Biofuel Not Used as Fuel, later; also see Form 6478, Biofuel Producer Credit, for more information.

Extension of section 40A biodiesel fuels credit. The biodiesel fuels credit, previously expired on December 31, 2011, is retroactively extended.

Future developments. The IRS has created a page on IRS.gov that includes information about Publication 510 at www.irs.gov/pub510. Information about any future developments will be posted on that page.

Reminders

Publication 510 updates. Publication 510 is not updated annually. Instead, it will be updated only when there are major changes in the tax law.

Use of international air travel facilities. Generally, the tax on the use of international air travel facilities increases annually. See the Instructions for Form 720 for the tax rate. For more information, see Air Transportation Taxes in chapter 4.

Aviation fuels for use in foreign trade. Aviation gasoline and kerosene for use in aviation are exempt from the leaking underground storage tank (LUST) tax.

Arrow shafts, tax rate. Generally, the tax on arrow shafts increases annually. See Form 720 for the tax rate.

Disregarded entities and qualified subchapter S subsidiaries. Qualified subchapter S subsidiaries (QSubs) and eligible single-owner disregarded entities are treated as separate entities for excise tax and reporting purposes. QSubs and eligible single-owner disregarded entities must pay and report excise taxes (other than IRS Nos. 31, 51, and 117), register for most excise tax activities, and claim any refunds, credits, and payments under the entity's employer identification number (EIN). These actions cannot take place under the owner's taxpayer identification number (TIN). Some QSubs and disregarded entities may already have an EIN. However, if you are unsure, please call the IRS Business and Specialty Tax line at 1-800-829-4933.Generally, QSubs and eligible single-owner disregarded entities will continue to be treated as disregarded entities for other federal tax purposes (other than employment taxes). For more information on these regulations, see Treasury Decision (T.D.) 9356, T.D. 9462, and T.D. 9596. You can find T.D. 9356 on page 675 of Internal Revenue Bulletin (I.R.B.) 2007-39 at  
www.irs.gov/pub/irs-irbs/irb07-39.pdf;  
T.D. 9462 on page 504 of I.R.B. 2009-42 at  
www.irs.gov/pub/irs-irbs/irb09-42.pdf;  
and T.D. 9596 on page 84 of I.R.B. 2012-30 at  
www.irs.gov/pub/irs-irbs/irb12-30.pdf.

Registration for certain activities. You are required to be registered for certain excise tax activities, such as blending of gasoline, diesel fuel, or kerosene outside the bulk transfer/terminal system. See the instructions for Form 637 for the list of activities for which you must register. Also see Registration Requirements under Fuel Taxes in chapter 1 for information on registration for activities related to fuel. Each business unit that has, or is required to have, a separate employer identification number must be registered. To apply for registration, complete Form 637 and provide the information requested in its instructions. If your application is approved, you will receive a Letter of Registration showing the activities for which you are registered, the effective date of the registration, and your registration number. A copy of Form 637 is not a Letter of Registration.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

This publication covers the excise taxes for which you may be liable and which are reported on Form 720 and other forms. It also covers fuel tax credits and refunds. For information on fuel credits against income tax (the section 40 credits for the production of cellulosic biofuel and second generation biofuel, and the section 40A credit for biodiesel and renewable diesel used as fuel) see the instructions for Form 6478 and Form 8864, Biodiesel and Renewable Diesel Fuels Credit.

Comments and suggestions.   We welcome your comments about this publication and your suggestions for future editions.

  You can write to us at the following address:

Internal Revenue Service 
Individual and Specialty Forms and Publications Branch 
SE:W:CAR:MP:T:I 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

  You can email us at taxforms@irs.gov. Please put “Publications Comment” on the subject line. You can also send us comments from www.irs.gov/Forms-&-Pubs/More-Information/ and select “Comment on Tax Forms and Publications”.

  Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.

Useful Items - You may want to see:

Publication

  • 509 Tax Calendars

Form (and Instructions)

  • 11-C Occupational Tax and Registration Return for Wagering

  • 637 Application for Registration (For Certain Excise Tax Activities)

  • 720 Quarterly Federal Excise Tax Return

  • 720X Amended Quarterly Federal Excise Tax Return

  • 730 Monthly Tax Return for Wagers

  • 1363 Export Exemption Certificate

  • 2290 Heavy Highway Vehicle Use Tax Return

  • 2290(SP) Declaración del Impuesto sobre el Uso de Vehículos Pesados en las Carreteras

  • 4136 Credit for Federal Tax Paid on Fuels

  • 6197 Gas Guzzler Tax

  • 6478 Biofuel Producer Credit

  • 6627 Environmental Taxes

  • 8849 Claim for Refund of Excise Taxes, and Schedules 1–3, 5, 6, and 8

  • 8864 Biodiesel and Renewable Diesel Fuels Credit

Information Returns   
  • Form 720-TO, Terminal Operator Report

  • Form 720-CS, Carrier Summary Report

  See How To Get Tax Help in chapter 17 for information about ordering forms and publications.

Guidance   

Excise Taxes Not Covered

In addition to the taxes discussed in this publication, you may have to report certain other excise taxes.

For tax forms relating to alcohol, firearms, and tobacco, visit the Alcohol and Tobacco Tax and Trade Bureau website at www.ttb.gov.

Heavy highway vehicle use tax.   You report the federal excise tax on the use of certain trucks, truck tractors, and buses used on public highways on Form 2290, Heavy Highway Vehicle Use Tax Return. The tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. Vans, pickup trucks, panel trucks, and similar trucks generally are not subject to this tax.

Note.

A Spanish version (Formulario 2290(SP)) is also available. See How To Get Tax Help in chapter 17.

Registration of vehicles.   Generally, you must prove that you paid your heavy highway vehicle use tax to register your taxable vehicle with your state motor vehicle department or to enter the United States in a Canadian or Mexican registered taxable vehicle. Generally, a copy of Schedule 1 (Form 2290) is stamped by the IRS and returned to you as proof of payment.

  
If you have questions on Form 2290, see its separate instructions, or you can call the Form 2290 call site at 1-866-699-4096 (toll free) from the United States, and 1-859-669-5733 (not toll free) from Canada and Mexico. The hours of service are 8:00 a.m. to 6:00 p.m. Eastern time.

Wagering tax and occupational tax.   The information on wagering tax can be found in the instructions for Form 730, Tax on Wagering, and Form 11-C, Occupational Tax and Registration Return for Wagering.


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