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Publication 510 - Introductory Material

Table of Contents

What's New

Indoor Tanning Services Tax. A tax of 10% applies to indoor tanning services paid for after June 30, 2010. See Chapter 10 for more information.

Federal tax deposits must be made by electronic funds transfer. You must use electronic funds transfer for all federal tax deposits (such as deposits of excise tax, employment tax, and corporate income tax) made after December 31, 2010. Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010. For more information on making federal tax deposits, see How to Make Deposits in Chapter 12.

Fuels derived from paper or pulp production. Credits for alternative fuels and alternative fuel mixtures are not available for any fuel sold or used after December 31, 2009, that is derived from the production of paper or pulp.

Credit for cellulosic biofuels. Credit for producers of cellulosic biofuels is not available for some fuels sold or used after December 31, 2009. See Credits not available for some cellulosic biofuels sold or used after December 31, 2009 in Chapter 2.

Use of international air travel facilities. For amounts paid during 2011, the tax on international flights is $16.30 per person for flights that begin or end in the United States, or $8.20 per person for domestic segments that begin or end in Alaska or Hawaii (applies only to departures). See Air Transportation Taxes in Chapter 4.

Expiration of biodiesel mixture, renewable diesel mixture, alternative fuels, and alternative fuel mixture credits. When this publication was prepared for printing, the credits for biodiesel mixtures, renewable diesel mixtures, alternative fuels, and alternative fuel mixtures were scheduled to expire on December 31, 2011. To find out if the credits are extended, monitor the news media or go to www.irs.gov, click on Forms and Publications, and then click on Changes to Current Tax Products.

Expiration of taxes on most fuels, tires, trucks, trailers, and tractors. When this publication was prepared for printing, all or a portion of the taxes on most fuels, tires, heavy trucks, trailers, and tractors were scheduled to expire on September 30, 2011. To find out if the taxes are extended, monitor the news media or go to www.irs.gov, click on Forms and Publications, and then click on Changes to Current Tax Products.

Reminders

Publication 510 updates.  Publication 510 will no longer be updated annually. Instead, Publication 510 will be updated only when there are major changes in the tax law discussed in this publication.

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.

Dyed diesel fuel used in trains. The train operator is no longer liable for the leaking underground storage tank (LUST) tax on dyed diesel fuel used in trains. The position holder of the dyed diesel fuel generally is liable for the LUST tax under IRS No. 105.

Inland waterways fuel use. Generally, the inland waterways fuel use tax is $.20 (IRS No. 64). However, the leaking underground storage tank (LUST) tax (IRS No. 125) must be paid on any liquid fuel used on inland waterways that is not subject to LUST tax under section 4041(d) or 4081. For example, gallons of Bunker C residual fuel oil must be reported under both IRS Nos. 64 and 125.

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 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). Thus, taxpayers filing Form 4136, Credit for Federal Tax Paid on Fuels, with Form 1040, Individual Income Tax Return, can use the owner's TIN. For more information on these regulations, see Treasury Decision (T.D.) 9356. You can find T.D. 9356 on page 675 of Internal Revenue Bulletin 2007-39 at www.irs.gov/pub/irs-irbs/irb07-39.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. It also covers fuel tax credits and refunds.

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 
Tax Products Coordinating Committee 
SE:W:CAR:MP:T:T:SP 
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. The asterisk must be included in the address. Please put “Publications Comment” on the subject line. Although we cannot respond individually to each email, 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

  • 2290(FR) Déclaration d'Impôt sur l'Utilisation des Véhicules Lourds sur les Routes

  • 4136 Credit for Federal Tax Paid on Fuels

  • 6197 Gas Guzzler Tax

  • 6478 Alcohol and Cellulosic Biofuel Fuels 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 15 for information about ordering forms and publications.

Notices   

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 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)) and a French version (Formulaire 2290(FR)) and separate instructions for each are also available. See How To Get Tax Help in 
chapter 15.

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 How To Get Tax Help in chapter 15, 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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