Instructions for Form 720 (03/2024)

Quarterly Federal Excise Tax Return

Section references are to the Internal Revenue Code unless otherwise noted.

Revised: 03/2024


Instructions for Form 720 - Introductory Material

Future Developments

For the latest information about developments related to Form 720 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form720.

What's New

This is an Image: caution.gifThe section 4261 airline ticket taxes and the section 4043 surtax on fuel used in a fractional ownership aircraft may expire during the quarter on March 8, 2024. Also on that date, the section 4081 and 4083 taxes on noncommercial aviation kerosene and gasoline may be lowered to the permanent $.043/gal rate. See Future Developments, earlier.

Inflation Adjustments for 2024

Arrow shafts (IRS No. 106).

The section 4161 tax on arrow shafts is increased to $0.62 per arrow shaft.

Transportation of persons by air (IRS No. 26).

The section 4261 tax on the amount paid for each domestic segment of taxable air transportation is increased to $5.00.

Use of international air travel facilities (IRS No. 27).

The section 4261 tax on the amount paid for international flights is increased to $22.20 per person for flights that begin or end in the United States. The section 4261 tax per person for domestic segments beginning or ending in Alaska or Hawaii is increased to $11.10 (applies only to departures).

Reminders

Superfund tax.

The Inflation Reduction Act of 2022 (the Act) reinstates and increases the section 4611 Hazardous Substance Superfund financing rate (petroleum Superfund tax rate) on domestic crude oil (IRS No. 53) and imported petroleum products (IRS No. 16), effective January 1, 2023 (the taxes previously expired on December 31,1995). The new IRS Nos. 53 and 16 are added to Form 720, Part I.

Renewable diesel and kerosene changes.

The Act made the following changes to the definition of renewable diesel and the treatment of kerosene, effective for fuel sold or used after 2022.

  • Renewable diesel no longer includes fuel derived from biomass that meets the requirements of a Department of Defense specification for military jet fuel or an American Society of Testing Materials (ASTM) specification for aviation turbine fuel.

  • Kerosene is no longer treated as diesel fuel for purposes of the renewable diesel mixture credit.

Sustainable aviation fuel credit.

The Act created a sustainable aviation fuel (SAF) credit under sections 40B and 6426(k), effective January 1, 2023, so line 12d is added to Form 720, Schedule C.

Liquefied hydrogen.

The Act removed liquefied hydrogen from the definition of alternative fuel under section 6426(d)(2) for purposes of the alternative fuel credit and alternative fuel mixture credit for fuel sold or used after 2022.

Kerosene used in aviation.

Kerosene is generally taxed at $.244 per gallon unless a reduced rate applies. The $.244 per gallon tax rate applies to kerosene removals unless it is removed from a terminal or refinery (or a qualified refueler truck, tanker, or tank wagon that is treated as a terminal) directly into the fuel tank of an aircraft. See Kerosene for use in aviation (IRS Nos. 69, 77, and 111) , later.

Butane mixture doesn’t qualify for a credit.

A mixture of butane (or other gasoline blendstock) and gasoline is a mixture of two taxable fuels. Therefore, it isn’t an alternative fuel mixture and doesn’t qualify for the section 6426 alternative fuel mixture credit. See section 6426(e)(2) and Rev. Rul. 2018-02 at IRS.gov/IRB/2018-02_IRB#RR-2018-02.

Reducing your excise tax liability.

For federal income tax purposes, reduce your expense for the section 4081 excise tax, whether taken as a deduction or as a component of cost of goods sold, by the amount of excise tax credits allowable under sections 6426(c), (e), and (k) (biodiesel mixture, alternative fuel mixture, and SAF, respectively). Similarly, reduce your expense for the section 4041 excise tax, whether taken as a deduction or as a component of cost of goods sold, by the amount of excise tax credit allowable under section 6426(d) (alternative fuel credit).

Exported gasoline blendstocks.

Claims for exported gasoline blendstocks taxed at $.001 per gallon are made on Schedule C, line 14b. Continue to use line 1b to make claims for exported gasoline blendstocks taxed at $.184 per gallon.

Electronic filing.

You can electronically file Form 720 through any electronic return originator (ERO), transmitter, and/or intermediate service provider (ISP) participating in the IRS e-file program for excise taxes. For more information on e-file, go to Excise Tax e-File & Compliance (ETEC) Programs - Forms 720, 2290, and 8849.

Federal tax deposits made by electronic funds transfer.

Generally, you must use electronic funds transfer to make federal tax deposits, such as deposits of employment tax, excise tax (for exceptions, see Payment of Taxes, later), and corporate income tax. Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). If you don't want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. EFTPS is a free service provided by the Department of the Treasury.

To get more information about EFTPS or to enroll in EFTPS, go to EFTPS.gov or call 800-555-4477. See Pub. 966.

General Instructions

Purpose of Form

Use Form 720 and attachments to report your liability by IRS No. and pay the excise taxes listed on the form. If you report a liability on Part I or Part II, you may be eligible to use Schedule C to claim a credit.

Who Must File

This is an Image: caution.gifSee Patient-centered outcomes research (PCOR) fee (IRS No. 133) in Part II for special rules about who must file to report the PCOR fee.

You must file Form 720 if:

  • You were liable for, or responsible for collecting, any of the federal excise taxes listed on Form 720, Parts I and II, for a prior quarter and you haven’t filed a final return; or

  • You are liable for, or responsible for collecting, any of the federal excise taxes listed on Form 720, Parts I and II, for the current quarter.

See How To File , later, for more information.

When To File

You must file a return for each quarter of the calendar year as follows.

Quarter covered Due by
Jan., Feb., Mar. April 30
Apr., May, June July 31
July, Aug., Sept. October 31
Oct., Nov., Dec. January 31

If any due date for filing a return falls on a Saturday, Sunday, or legal holiday, you may file the return on the next business day.

Send your return to the IRS using the U.S. Postal Service or a designated private delivery service to meet the “timely mailing as timely filing/paying” rule. See Private Delivery Services, later.

Floor stocks tax.

Report the floor stocks tax on ozone-depleting chemicals (ODCs), IRS No. 20, on the return due by July 31 of each year. The tax payment is due by June 30. See Floor Stocks Tax , later.

Where To File

Send Form 720 to:

Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0009

How To File

If you aren't reporting a tax that you normally report, enter a zero on the appropriate line on Form 720, Part I or II. Also, if you have no tax to report, enter “None” on Form 720, Part III, line 3; sign and date the return. If you file the second quarter Form 720 only to report the PCOR fee, no filing is required in other quarters unless you have to report other fees or taxes.

If you have adjustments to liabilities reported for prior quarters, see Form 720-X, Amended Quarterly Federal Excise Tax Return. Don't enter adjustments on Form 720.

If you attach additional sheets, enter your name and EIN on each sheet.

Final Return

File a final return if you have been filing Form 720 and you:

  1. Go out of business, or

  2. Won't owe excise taxes that are reportable on Form 720 in future quarters.

This is an Image: taxtip.gifIf you are only filing to report zero tax and you won't owe excise tax in future quarters, check the Final return box above Part I of Form 720.

Recordkeeping

Keep copies of your tax return, records, and accounts of all transactions to show that the correct tax has been paid. Keep records to support all claims and all exemptions at least 4 years from the latest of the date:

  • The tax became due,

  • You paid the tax, or

  • You filed a claim.

Penalties and Interest

If you receive a notice about a penalty after you file this return, reply to the notice with an explanation and we will determine if you meet reasonable-cause criteria. Don't include an explanation when you file your return.

Trust fund recovery penalty.

If communications, air transportation, and indoor tanning services taxes are collected but not paid to the U.S. Treasury or are willfully not collected, the trust fund recovery penalty may apply. The penalty is the full amount of the unpaid tax.

The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so.

A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an employee of a sole proprietorship, an accountant, or a volunteer director/trustee. A responsible person may also include one who signs checks for the business or otherwise has authority to cause the spending of business funds.

Willfully means voluntarily, consciously, and intentionally. A responsible person acts willfully if they know the required actions aren't taking place.

Additional Information

You may find the following products helpful when preparing Form 720 and any attachments.

Private Delivery Services (PDSs)

You can use PDSs designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. Go to IRS.gov/PDS for the current list of designated services. The PDS can tell you how to get written proof of the mail date. For the IRS mailing address to use if you are using a PDS, go to IRS.gov/PDSStreetAddresses.

This is an Image: caution.gifPDSs can’t deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address.

Photographs of Missing Children

The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in instructions 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.

Specific Instructions

Name and Address

Enter your name, address, and the quarter ending date (month and year). If your address changes, check the address change box above Form 720, Part I.

P.O. box.

If the post office doesn't deliver mail to the street address and you have a P.O. box, show the box number instead of the street address.

Foreign address.

Follow the country's practice for entering the postal code. Don't abbreviate the country name.

Employer Identification Number (EIN)

Enter the correct EIN. If you are a one-time filer, you may not need an EIN. See Gas guzzler tax (IRS No. 40) , later. If you don't have an EIN, you may apply for one online by going to IRS.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4, Application for Employer Identification Number, to the IRS.

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 their EINs. These actions can't 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 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, with Form 1040, U.S. Individual Income Tax Return, or 1040-SR, U.S Tax Return for Seniors, can use the owner's TIN. For more information, see Regulations section 301.7701-2(c)(2).

Signature

Form 720 must be signed by a person authorized by the entity to sign this return.

Third Party Designee

If you want to allow an employee of your business, a return preparer, or other third party to discuss your Form 720 with the IRS, check the “Yes” box on Form 720 under Third Party Designee. Also, enter the designee's name, phone number, and any five digits that person chooses as their personal identification number (PIN).

By checking the “Yes” box, you are authorizing the IRS to speak with the designee to answer any questions relating to the processing of, or the information reported on,
Form 720. You are also authorizing the designee to:

  • Exchange information concerning Form 720 with the IRS, and

  • Respond to certain IRS notices that you have shared with your designee relating to Form 720. The IRS won't send notices to your designee.

You aren't authorizing the designee to receive any refund check, bind you to anything (including additional tax liability), or otherwise represent you before the IRS. If you want to expand the designee's authority, see Pub. 947, Practice Before the IRS and Power of Attorney.

The authorization will automatically expire 1 year from the due date (without regard to extensions) for filing your Form 720. If you or your designee wants to revoke this authorization, send a written statement of revocation to:

Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999
See Pub. 947 for more information.

Paid Preparer Use Only

A paid preparer must sign Form 720 and provide the information in the Paid Preparer Use Only section at the end of the form if the preparer was paid to prepare the form and isn't an employee of the filing entity. The preparer must give you a copy of the form in addition to the copy to be filed with the IRS. If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, you must also enter the firm’s name and the EIN of the firm. However, you can't use the EIN of the tax preparation firm in place of your PTIN. You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, go to IRS.gov/PTIN.

Part I

Environmental Taxes

Use Form 6627, Environmental Taxes, to figure the environmental taxes on:

  • Domestic petroleum superfund tax, IRS No. 53.

  • Chemicals (other than ODCs), IRS No. 54.

  • Imported chemical substances, IRS No. 17.

  • Imported petroleum products superfund tax, IRS No. 16.

  • Oil spill liability, IRS Nos. 18 and 21.

  • Ozone-depleting chemicals (ODCs), IRS No. 98.

  • Imported products that used ODCs as materials in the manufacture or production of the product, IRS No. 19.

  • The floor stocks tax on ODCs, IRS No. 20 (reported on Form 720, Part II).

Attach Form 6627 to Form 720. The tax rates for these taxes are shown on Form 6627.

Communications Taxes

Communications Services (IRS No. 22)

The tax is 3% of amounts paid for local telephone service and teletypewriter exchange service.

Who Must File

The person receiving the payment for communications services must collect and submit the tax and file the return. Enter the amount of tax collected or considered collected for the quarter.

Credits or Refunds

If tax is collected and paid over for nontaxable services from the communications tax, the collector may request a credit or refund as described below.

Collectors.

The collector may request a credit or refund only if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. These requirements also apply to nontaxable service refunds.

Collectors using the regular method for deposits.

Collectors using the regular method for deposits must use Form 720-X to request a credit or refund.

Collectors using the alternative method for deposits.

Collectors using the alternative method for deposits must adjust their separate accounts for the credit or refund. For more information, see Alternative method (IRS Nos. 22, 26, 27, and 28) , later.

Air Transportation Taxes

Transportation of Persons by Air (IRS No. 26)

The taxes on transportation of persons by air are the percentage tax and the domestic segment tax. Add the percentage tax and the domestic segment tax to get the total tax on transportation of persons by air.

Note.

The percentage and domestic segment taxes don't apply on a flight if the surtax on fuel used in a fractional ownership program aircraft is imposed. For more information, see Surtax on any liquid used in a fractional ownership program aircraft as fuel (IRS No. 13), later.

Who Must File

The person receiving the payment for air transportation services must do all of the following.

  • Collect the tax.

  • Submit the tax.

  • File Form 720 to report the amount of the tax collected, or considered collected, for the quarter.

Exemption for amounts paid for aircraft management services.

Effective December 23, 2017, certain payments related to the management of private aircraft are exempt from the excise taxes imposed on taxable transportation by air. See Pub. 510.

Percentage tax.

The percentage tax is 7.5% of amounts paid for taxable transportation of persons by air.

Domestic segment tax.

For calendar year 2024, the tax on the amount paid for each domestic segment of taxable transportation is $5.00.

Example.

In January 2024, Frank Jones pays $268.00 to a commercial airline for a flight in January from Washington to Chicago with a stopover in Cleveland. The flight has two segments. The price includes the $240 fare and $28.00 excise tax [($240 × 7.5%) + (2 × $5.00)] for which Frank is liable. The airline collects the tax from Frank and submits it to the government.

Charter flights.

If an aircraft is chartered, and the flight isn't one where the tax on fuel used in a fractional ownership program aircraft is imposed, the domestic segment tax for each segment of taxable transportation is figured by multiplying the tax by the number of passengers transported on the aircraft.

Example.

In March 2024, Tim Clark pays $1,145.00 to an air charter service to carry seven employees from Washington to Detroit with a stopover in Pittsburgh. The flight has two segments. The price includes the $1,000 charter payment and $145.00 excise tax [($1,000 × 7.5%) + (2 × $5.00 × 7 passengers)] for which Tim is liable. The charter service collects the tax from Tim and submits it to the government.

Rural airports.

If a segment is to or from a rural airport, the domestic segment tax doesn't apply.

Transportation of Property by Air (IRS No. 28)

The tax is 6.25% of amounts paid for transportation of property by air. The tax doesn't apply if the surtax on fuel used in a fractional ownership program aircraft is imposed. See Surtax on any liquid used in a fractional ownership program aircraft as fuel (IRS No. 13), later.

Use of International Air Travel Facilities (IRS No. 27)

For calendar year 2024, the section 4261 excise tax on any amount paid for international air transportation, if the transportation begins or ends in the United States, is generally $22.20. However, a lower rate of tax applies to a domestic segment beginning or ending in Alaska or Hawaii, and the tax applies only to departures. For calendar year 2024, the rate of tax is $11.10.

Communications and Air Transportation Taxes—Uncollected Tax Report

A separate report is required to be filed by collecting agents of communications services (local and teletypewriter service) and air transportation taxes if the person from whom the facilities or services tax (the tax) is required to be collected (the taxpayer) refuses to pay the tax, or it's impossible for the collecting agent to collect the tax. The report must contain the name and address of the taxpayer, the type of facility provided or service rendered, the amount paid for the facility or service (the amount on which the tax is based), and the date paid.

Regular method taxpayers.

For regular method taxpayers, the report must be filed by the due date of the Form 720 on which the tax would have been reported.

Alternative method taxpayers.

For alternative method taxpayers, the report must be filed by the due date of the Form 720 that includes an adjustment to the separate account for the uncollected tax. See Alternative method (IRS Nos. 22, 26, 27, and 28) , later.

Where to file your uncollected tax report.

Don't file the uncollected tax report with Form 720. Instead, mail the report to:

Department of the Treasury
Internal Revenue Service
Cincinnati, OH 45999

Fuel Taxes

First taxpayer's report.

If you are reporting gallons of taxable fuel that may again be subject to tax, you may need to file a first taxpayer's report. The report must contain all the information as shown in the Model Certificate B in the Appendix of Pub. 510.

The person who paid the first tax must do all of the following.

  • Give a copy of the first taxpayer's report to the buyer.

  • File the first taxpayer's report with Form 720 for the quarter for which the report relates.

  • Enter “EXCISE—FIRST TAXPAYER'S REPORT” across the top of a separate copy of the report, and by the due date of Form 720, send the copy to:

    Department of the Treasury
    Internal Revenue Service
    Cincinnati, OH 45999-0555

Diesel (IRS No. 60).

If you are liable for the diesel fuel tax on removal at the terminal rack, report these gallons on line 60(a). If you are liable for the diesel fuel tax on events other than removal at the terminal rack, report these gallons on line 60(b). If you are liable for the diesel fuel tax because you have produced diesel by blending biodiesel with taxed diesel outside of the bulk transfer/terminal system, report these gallons of biodiesel on line 60(c). If you report gallons on line 60(c), don't report those gallons on line 60(b).

Multiply the total number of gallons subject to tax on lines 60(a), 60(b), and 60(c) by $.244 and make one entry in the tax column.

See Schedule T. Two-Party Exchange Information Reporting, later, if applicable.

Diesel-water emulsion (IRS No. 104).

If you are liable for the reduced rate (see below) of tax on a diesel-water emulsion removal at the terminal rack or other taxable event, report these gallons on the line for IRS No. 104.

Requirements.

All of the following requirements must be met to be eligible for the reduced rate: (a) the diesel-water emulsion must contain at least 14% water; (b) the emulsion additive must be registered by a U.S. manufacturer with the Environmental Protection Agency (EPA) under the Clean Air Act, section 211 (as in effect on March 31, 2003); and (c) the taxpayer must be registered by the IRS. If these requirements aren't met, you must report the sale, removal, or use of a diesel-water emulsion as diesel.

IRS Nos. 105, 107, and 119.

Tax is imposed at $.001 per gallon on removals, entries, and sales of gasoline, diesel, and kerosene described as exempt transactions. Multiply the total number of gallons subject to tax for each fuel by $.001 and enter the amount in the tax column for the following IRS Nos.

  • IRS No. 105, dyed diesel, LUST tax.

  • IRS No. 107, dyed kerosene, LUST tax.

  • IRS No. 119, LUST tax, other exempt removals; report gasoline blendstocks, kerosene used for a feedstock purpose, and diesel or kerosene sold or used in Alaska.

Kerosene (IRS No. 35).

If you are liable for the kerosene tax on removal at the terminal rack (not located at an airport), report these gallons on line 35(a). If you are liable for the kerosene tax on events other than removal at the terminal rack, report these gallons of kerosene on line 35(b).

Multiply the total number of gallons subject to tax on lines 35(a) and 35(b) by $.244 and make one entry in the tax column.

See Schedule T. Two-Party Exchange Information Reporting, later, if applicable.

Kerosene for use in aviation (IRS Nos. 69, 77, and 111).

Generally, kerosene is taxed at $.244 per gallon unless a reduced rate applies. See Kerosene for Use in Aviation in Pub. 510, for more details about these reduced rates.

  • If you're liable for kerosene tax on removal directly from a terminal into the fuel tank of an aircraft for use in aviation, the tax rate is $.219 per gallon. This rate applies to kerosene used in noncommercial aviation. This rate can also apply to kerosene used in commercial aviation or for nontaxable aviation uses if the requirements for a further reduced rate aren't met. Report these gallons on the line for IRS No. 69.

  • If you're liable for kerosene tax on removal directly from a terminal into the fuel tank of an aircraft for use in commercial aviation (other than foreign trade), the tax rate is $.044 per gallon. Report these gallons on the line for IRS No. 77. The line for IRS No. 77 is only applicable to registered commercial aviation operators (Form 637 "Y" Registrant).

  • If you’re liable for kerosene tax on removal directly from a terminal into the fuel tank of an aircraft for nontaxable uses, the tax rate is $.001. Report these gallons on the line for IRS No. 111.

See Pub. 510 for foreign trade rules.

Note.

Fuel used in a fractional ownership program aircraft is also subject to a surtax of $.141 per gallon. For more information, see Surtax on any liquid used in a fractional ownership program aircraft as fuel (IRS No. 13), later.

Other fuels (IRS No. 79).

You are liable for the tax on the fuels listed below when they are delivered into the fuel supply tank of a motor vehicle or motorboat (or trains for B-100). Use the following table to determine the tax for each gallon. Fill in the number of gallons and the appropriate rate in the Rate column on the line for IRS No. 79. If more than one rate applies, leave the Rate column blank and attach a schedule showing the rates and number of gallons taxed at each rate.

Fuel Tax Rate
per Gallon
Qualified—      
Ethanol produced from coal   $.184
Methanol produced from coal   .184
Partially exempt—      
Ethanol produced from natural gas   .114
Methanol produced from natural gas   .0925
B-100 (100% biodiesel)   .244
Liquefied gas derived from biomass   .184
Other fuels not shown   .184

Gasoline (IRS No. 62).

If you are liable for the gasoline tax on removal at the terminal rack, report these gallons on line 62(a). If you are liable for the gasoline tax on events other than removal at the terminal rack, report these gallons on line 62(b). If you are liable for the gasoline tax because you have blended alcohol with taxed gasoline outside of the bulk transfer/terminal system, report these gallons of alcohol on line 62(b).

Multiply the total number of gallons subject to tax on lines 62(a) and 62(b) by $.184. Combine the tax for lines 62(a) and 62(b) and make one entry in the tax column.

See Schedule T. Two-Party Exchange Information Reporting, later, if applicable.

Surtax on any liquid used in a fractional ownership program aircraft as fuel (IRS No. 13).

Fuel used in a fractional ownership program aircraft, as defined below, after March 31, 2012, is subject to a surtax of $.141 per gallon. The fractional ownership program manager is liable for the surtax. If you are liable, report these gallons on the line for IRS No. 13.

The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. If the surtax is imposed, the flight isn't considered commercial aviation. Instead, the tax on the fuel used in the flight is imposed at the noncommercial aviation rate of $.219 per gallon (IRS No. 69).

If the surtax is imposed, the following taxes don't apply.

  • Transportation of persons by air (IRS No. 26).

  • Transportation of property by air (IRS No. 28).

  • Use of international air travel facilities (IRS No. 27).

Fractional ownership aircraft program is a program under which:

  • A single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners;

  • There are one or more fractional owners per fractional program aircraft, with at least one fractional program aircraft having more than one owner;

  • For at least two fractional program aircraft, none of the ownership interests in the aircraft are less than the minimum fractional ownership interest or held by the program manager;

  • There exists a dry-lease aircraft exchange arrangement among all of the fractional owners; and

  • There are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program.

Fractional program aircraft.

Any aircraft that, in any fractional ownership aircraft program, is listed as a fractional program aircraft in the management specifications issued to the manager of such program by the Federal Aviation Administration under subpart K of part 91, title 14, Code of Federal Regulations, and is registered in the United States.

Fractional program aircraft aren't considered used for transportation of a qualified fractional owner, or on account of such qualified fractional owner, when they are used for flight demonstration, maintenance, or crew training. In such situations, the flight isn't commercial aviation. Instead, the tax on the fuel used in the flight is imposed at the noncommercial aviation rate.

Fractional owner.

Any person owning any interest (including the entire interest) in a fractional program aircraft.

Dry-lease aircraft exchange.

An agreement, documented by the written program agreements, under which the fractional program aircraft are available, on an as-needed basis without crew, to each fractional owner.

Special rule relating to deadhead service.

A fractional program aircraft won't be considered to be used on account of a qualified fractional owner when it's used in deadhead service and a person other than a qualified fractional owner is separately charged for such service.

More information.

See section 4043 for more information on the surtax.

Aviation gasoline (IRS No. 14).

Aviation gasoline is taxed at the rate shown on Form 720.

Also, a surtax of $.141 per gallon applies on fuel used in an aircraft which is part of a fractional ownership program.

For further information on fractional ownership program aircraft, see Surtax on any liquid used in a fractional ownership program aircraft as fuel (IRS No. 13) , earlier.

Alternative fuel (IRS Nos. 112, 118, and 120–124).

Alternative fuel is any liquid other than gas oil, fuel oil, or any product taxable under section 4081. You are liable for tax on alternative fuel delivered into the fuel supply tank of a motor vehicle or motorboat, or on certain bulk sales. Report the tax on the line for the IRS No. listed in the following table.

Alternative Fuel IRS No.
Liquefied petroleum gas (LPG) 112
“P Series” fuels 118
Compressed natural gas (CNG) 120
Liquefied hydrogen 121
Fischer-Tropsch process liquid fuel from coal (including peat) 122
Liquid fuel derived from biomass 123
Liquefied natural gas (LNG) 124

For sales or uses after 2015, the following gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE) applies.

  • LPG (includes propane, pentane, or mixtures of those gases), taxed at $.183 per GGE, has a GGE of 5.75 pounds or 1.353 gallons of LPG.

  • LNG, taxed at $.243 per DGE, has a DGE of 6.06 pounds or 1.71 gallons of LNG.

  • CNG, taxed at $.183 per GGE, has a GGE of 5.66 pounds or 123.57 cubic feet of CNG.

Example.

10,000 gallons of LNG ÷ 1.71 = 5,848 DGE x $.243 = $1,421.06 tax.

Retail Tax

Truck, Trailer, and Semitrailer Chassis and Bodies, and Tractors (IRS No. 33)

The tax is 12% of the sales price on the first retail sale of each unit. The tax applies to:

  • Truck chassis and bodies, except truck chassis and bodies suitable for use with a vehicle with a gross vehicle weight (GVW) of 33,000 pounds or less;

  • Trailer and semitrailer chassis and bodies, except trailer and semitrailer chassis and bodies suitable for use with a vehicle with a GVW of 26,000 pounds or less; and

  • Tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer, except tractors that have a GVW of 19,500 pounds or less and a gross combined weight of 33,000 pounds or less.

Generally, gross combined weight means the weight of a tractor and the weight of its trailer(s).

The tax imposed on parts and accessories sold on or in connection with the units listed above and the tax imposed on the separate purchase of parts and accessories for the units listed above don't apply to an idling reduction device, described next, or to insulation that has an R value of at least R35 per inch.

Idling reduction device.

Any device or system of devices that provides the tractor with services, such as heat, air conditioning, and electricity, without the use of the main drive engine while the tractor is temporarily parked or stationary. The device must be affixed to the tractor and determined by the Administrator of the EPA, in consultation with the Secretary of Energy and Secretary of Transportation, to reduce idling while parked or stationary.

Figure the tax for each vehicle sold and enter the total for the quarter on the line for IRS No. 33.

Gross vehicle weight.

The gross vehicle weight (GVW) means the maximum total weight of a loaded vehicle. Generally, this maximum total weight is the GVW rating provided by the manufacturer or determined by the seller of the completed article. The seller's GVW rating must be determined for excise tax purposes on the basis of the strength of the chassis frame and the axle capacity and placement. The seller may not take into account any readily attachable components (such as tires or rim assemblies) in determining the GVW. See Regulations section 145.4051-1(e)(3) for more information.

The following four classifications of truck body types meet the suitable-for-use standard and will be excluded from the retail excise tax.

  • Platform truck bodies 21 feet or less in length.

  • Dry freight and refrigerated truck van bodies 24 feet or less in length.

  • Dump truck bodies with load capacities of 8 cubic yards or less.

  • Refuse packer truck bodies with load capacities of 20 cubic yards or less.

Section 4051(d) tire credit.

A tax credit may be claimed equal to the amount of tax that has been imposed on each tire that is sold on or in connection with the first retail sale of a taxable vehicle reported on IRS No. 33. Claim the section 4051(d) tire credit on Schedule C, line 14a.

Ship Passenger Tax

Transportation by water (IRS No. 29).

A tax is imposed on the operator of commercial ships. The tax is $3 for each passenger on a commercial passenger ship that has berth or stateroom accommodations for at least 17 passengers if the trip is over 1 or more nights. A voyage extends “over 1 or more nights” if it lasts longer than 24 hours. The tax also applies to passengers on any commercial ship that transports passengers engaged in gambling aboard the ship beyond the territorial waters of the United States. Enter the number of passengers for the quarter on the line for IRS
No. 29.

Other Excise Tax

Obligations not in registered form (IRS No. 31).

For obligations issued during the quarter, enter the principal amount of the obligation multiplied by the number of calendar years (or portion thereof) during the period beginning on the issue date and ending on the maturity date on the line for IRS No. 31.

Foreign Insurance Taxes

Policies issued by foreign insurers (IRS No. 30).

Enter the amount of premiums paid during the quarter on policies issued by foreign insurers. Multiply the premiums paid by the rates listed on Form 720 and enter the total for the three types of insurance on the line for IRS No. 30.

Section 4371(3) tax on foreign reinsurance premiums no longer applies.

The 1% tax doesn’t apply to premiums paid on a policy of reinsurance issued by one foreign reinsurer to another foreign insurer or reinsurer, under the situations described in Rev. Rul. 2008-15, 2008-12 I.R.B. 633. See Rev. Rul. 2016-03, 2016-3 I.R.B. 282, available at IRS.gov/IRB/2016-03_IRB#RR-2016-03.

Who must file.

The person who pays the premium to the foreign insurer (or to any nonresident person such as a foreign broker) must pay the tax and file the return. Otherwise, any person who issued or sold the policy, or who is insured under the policy, is required to pay the tax and file the return.

Treaty-based return positions under section 6114.

Foreign insurers and reinsurers who take the position that a treaty of the United States overrules, or otherwise modifies, an Internal Revenue law of the United States must disclose such position. This disclosure must be made once a year on a statement which must report the payments of premiums that are exempt from the excise tax on policies issued by foreign insurers for the previous calendar year. This statement is filed with the first quarter Form 720, which is due before May 1 of each year.

You may be able to use Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), as a disclosure statement.

At the top of Form 720, enter “Section 6114 Treaty.” If you have no other transactions reportable on Form 720, complete Form 720 as follows.

  1. If this is your final return, check the Final return box.

  2. Enter “None” on lines 1 and 3.

  3. Sign the return.

You need an EIN to file Form 720. If you don't have an EIN, see Employer Identification Number (EIN), earlier.

Where to file your treaty-based return positions under section 6114.

All filers should mail Form 720 with the attached Form 8833 or disclosure statement to the address listed under Where To File , earlier. See the Caution under Private Delivery Services (PDSs) , earlier.

Manufacturers Taxes

This is an Image: caution.gifDon't include the excise tax on coal in the sales price when determining which tax rate to use for IRS Nos. 36, 37, 38, and 39.

Underground mined coal (IRS Nos. 36 and 37).

The tax on underground mined coal is the lower of $1.10 per ton or 4.4% of the sales price. Enter on the line for IRS No. 36 the number of tons of underground mined coal sold at $25 or more per ton. Enter on the line for IRS No. 37 the total sales price for all sales of underground mined coal sold at a selling price of less than $25 per ton.

Surface mined coal (IRS Nos. 38 and 39).

The tax on surface mined coal is the lower of $.55 per ton or 4.4% of the sales price. Enter on the line for IRS No. 38 the number of tons of surface mined coal sold at $12.50 or more per ton. Enter on the line for IRS No. 39 the total sales price for all sales of surface mined coal sold at a selling price of less than $12.50 per ton.

Taxable tires (IRS Nos. 108, 109, and 113).

A tax is imposed on taxable tires sold by the manufacturer, producer, or importer at the rate of $.0945 ($.04725 in the case of a bias ply tire or super single tire) for each 10 pounds of the maximum rated load capacity over 3,500 pounds. Figure the tax for each tire sold in each category, as shown in the following chart, and enter the total for the quarter on the line for IRS No. 108, 109, or 113. Enter the number of tires for each IRS No.

IRS No. Taxable Tire Category Rate (for each 10 pounds of the maximum rated load capacity over 3,500 pounds)
108 Taxable tires other than bias ply or super single tires $.0945
109 Taxable tires, bias ply or super single tires (other than super single tires designed for steering) .04725
113 Taxable tires, super single tires designed for steering .0945

A taxable tire is any tire of the type used on highway vehicles if wholly or partially made of rubber and if marked according to federal regulations for highway use. A bias ply tire is a pneumatic tire on which the ply cords that extend to the beads are laid at alternate angles substantially less than 90 degrees to the centerline of the tread. A super single tire is a tire greater than 13 inches in cross section width designed to replace two tires in a dual fitment, but doesn't include any tire designed for steering.

Gas guzzler tax (IRS No. 40).

Use Form 6197, Gas Guzzler Tax, to figure the liability for this tax. Attach
Form 6197 to Form 720. The tax rates for the gas guzzler tax are shown on Form 6197.

One-time filing.

If you import a gas guzzling automobile, you may be eligible to make a one-time filing of Form 720 and Form 6197 if you meet all of the following conditions.

  • You don't import gas guzzling automobiles in the course of your trade or business.

  • You aren't required to file Form 720 reporting excise taxes for the calendar quarter, except for a one-time filing.

Follow the steps below to make a one-time filing.

  1. File Form 720 for the quarter in which you incur liability for the tax. See When To File , earlier.

  2. Pay the tax with Form 720. No deposits are required.

  3. If you are an individual and don't have an EIN, enter your social security number (SSN) or individual taxpayer identification number (ITIN) on Form 720 and Form 720-V, Payment Voucher, in the space for the EIN.

  4. Check the one-time filing box on the line for the gas guzzler tax.

Vaccine taxes (IRS No. 97).

A tax is imposed on the sale or use of a vaccine manufactured, produced, or entered into the United States at $.75 per dose if it:

  • Contains diptheria toxoid, tetanus toxoid, pertussis bacteria, extracted or partial cell bacteria, specific pertussis antigens, or polio virus;

  • Is against measles, mumps, rubella, hepatitis A, hepatitis B, chicken pox, rotavirus gastroenteritis, or human papillomavirus;

  • Is any HIB (haemophilus influenza type B) vaccine;

  • Is any meningococcal vaccine;

  • Is any conjugate vaccine against streptococcus pneumonia; or

  • Any trivalent vaccine against seasonal influenza or any other vaccine against seasonal influenza.

The effective date for the tax on any other vaccine against seasonal influenza is the later of August 1, 2013, or the date the Secretary of the Department of Health and Human Services lists a vaccine against seasonal influenza for purposes of compensation for any vaccine-related injury or death through the Vaccine Injury Compensation Trust Fund.

If any taxable vaccine is combined with one or more additional taxable vaccines, then the tax is imposed on each vaccine included in the combination.

Example.

MMR contains three taxable vaccines: measles, mumps, and rubella. The tax per dose on MMR is $2.25 (3 x $.75).

Add the tax for each taxable vaccine and enter the total tax on the line for IRS No. 97.

Part II

Patient-centered outcomes research (PCOR) fee (IRS No. 133).

The PCOR fee is imposed on issuers of specified health insurance policies (section 4375) and plan sponsors of applicable self-insured health plans (section 4376) for policy and plan years ending on or after October 1, 2012. Generally, references to taxes on Form 720 include this fee.

Specified health insurance policies.

For issuers of specified health insurance policies, the fee for a policy year ending on or after October 1, 2022, but before October 1, 2023, is $3.00 (line 133(b)) ($2.79 for a policy year ending on or after October 1, 2021, but before October 1, 2022 (line 133(a)), multiplied by the average number of lives covered under the policy for that policy year. Generally, issuers of specified health insurance policies must use one of the following four alternative methods to determine the average number of lives covered under a policy for the policy year.

  1. The actual count method.

  2. The snapshot method.

  3. The member months method.

  4. The state form method.

Applicable self-insured health plans.

For plan sponsors of applicable self-insured health plans, the fee for a plan year ending on or after October 1, 2022, but before October 1, 2023, is $3.00 (line 133(d)) ($2.79 for a policy year ending on or after October 1, 2021, but before October 1, 2022 (line 133(c)), multiplied by the average number of lives covered under the plan for that plan year. Generally, plan sponsors of applicable self-insured health plans must use one of the following three alternative methods to determine the average number of lives covered under a plan for the plan year.

  1. Actual count method.

  2. Snapshot method.

  3. Form 5500 method.

Reporting and paying the fee.

File Form 720 annually to report and pay the fee on the second quarter Form 720 no later than July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies. Because the rate used to determine the fee varies from year to year, you should determine the fee using the instructions for the second quarter Form 720. If you file Form 720 only to report the fee, don't file Form 720 for the first, third, or fourth quarter of the year. If you file Form 720 to report quarterly excise tax liability for the first, third, or fourth quarter of the year (for example, filers reporting the foreign insurance tax (IRS No. 30), don't make an entry on the line for IRS No. 133 on those filings).

Deposits aren't required for this fee, so issuers and plan sponsors aren't required to pay the fee using EFTPS. However, if the fee is paid using EFTPS, the payment should be applied to the second quarter. See Electronic deposit requirement under Payment of Taxes , later.

Report the average number of lives covered in column (a). Apply the applicable rate ((b) Rate for avg. covered life) and enter the fee in column (c).

Combine the fees for specified health insurance policies and applicable self-insured health plans and enter the total in the tax column on the line for IRS No. 133.

More information.

For more information, including methods for calculating the average number of lives covered, see sections 4375, 4376, and 4377.

Sport fishing equipment (other than fishing rods and fishing poles) (IRS No. 41).

The tax on sport fishing equipment is 10% of the sales price. The tax is paid by the manufacturer, producer, or importer. Taxable articles include reels, fly fishing lines (and other lines not over 130 pounds test), fishing spears, spear guns, spear tips, terminal tackle, fishing supplies and accessories, and any parts or accessories sold on or in connection with these articles. See Pub. 510 for a complete list of taxable articles. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 41.

Fishing rods and fishing poles (IRS No. 110).

The tax on fishing rods and fishing poles (and component parts) taxed at a rate of 10% will have a maximum tax of $10 per article. The tax is paid by the manufacturer, producer, or importer. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 110.

Electric outboard motors (IRS No. 42).

The tax on an electric outboard motor is 3% of the sales price. The tax is paid by the manufacturer, producer, or importer. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 42.

Fishing tackle boxes (IRS No. 114).

The tax on fishing tackle boxes is 3% of the sales price. The tax is paid by the manufacturer, producer, or importer. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 114.

Bows, quivers, broadheads, and points (IRS No. 44).

The tax on bows is 11% of the sales price. The tax is paid by the manufacturer, producer, or importer. It applies to bows having a peak draw weight of 30 pounds or more. The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 44.

Arrow shafts (IRS No. 106).

The tax on arrow shafts is increased to $0.62 per arrow shaft. The tax is paid by the manufacturer, producer, or importer of any arrow shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow which after its assembly meets either of the following conditions.

  • It measures 18 inches or more in overall length.

  • It measures less than 18 inches in overall length but is suitable for use with a taxable bow, described earlier.

Exemption for certain wooden arrows.

The tax doesn't apply to any shaft made of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) and used in the manufacture of any arrow which after its assembly meets both of the following conditions.

  • It measures 5/16 of an inch or less in diameter.

  • It isn't suitable for use with a taxable bow, described earlier.

Add the tax on each sale during the quarter and enter the total on the line for IRS No. 106.

Indoor Tanning Services Tax

Indoor tanning services (IRS No. 140).

The tax on indoor tanning service is 10% of the amount paid for that service. The tax is paid by the person paying for the indoor tanning service and is collected by the person receiving payment for the indoor tanning services.

Who must file.

The person receiving the payment for indoor tanning services (collector) must collect and remit the tax and file the return. If the tax isn't collected for any reason, the collector is liable for the tax.

Definition of indoor tanning services.

Indoor tanning service means a service employing any electronic product designed to incorporate one or more ultraviolet lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning. The term doesn't include phototherapy service performed by, and on the premises of, a licensed medical professional (such as a dermatologist, psychologist, or registered nurse). See Regulations section 49.5000B-1 for more information and special rules for qualified physical fitness facilities, undesignated payment cards, and bundled payments.


Enter the amount of indoor tanning services tax collected (or due for failing to collect the tax) for the quarter on the line for IRS No. 140.

Other Part II Taxes

Inland waterways fuel use tax (IRS No. 64).

If you are liable for the inland waterways fuel use tax, report the number of gallons subject to tax on the line for IRS No. 64. Certain fuels must also be reported under IRS No. 125 (discussed next).

This is an Image: caution.gifThe inland waterways fuel use tax applies at the rate listed on Form 720. This is in addition to all other taxes imposed on the sale or use of the fuel.

Leaking underground storage tank (LUST) tax on inland waterways fuel use (IRS No. 125).

The LUST tax must be paid on any liquid fuel used on inland waterways that isn't 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.

Section 40 fuels (IRS No. 51).

An excise tax is imposed (recaptured) if you claim the second generation biofuel producer credit and you don't use the fuel for the purposes described under Qualified Second Generation Biofuel Production in the Instructions for Form 6478, Biofuel Producer Credit. When recapturing, you must pay a tax on each gallon of second generation biofuel at the rate you used to figure the credit.

The tax rate for second generation biofuel is $1.01 per gallon. Fill in the number of gallons and the appropriate rate in the Rate column on the line for IRS No. 51.

Biodiesel sold as, but not used as, fuel (IRS No. 117).

You must pay a tax (recapture) on each gallon of biodiesel or renewable diesel on which a credit was claimed at the rate used to figure the credit if you:

  • Use it (including a mixture) other than as a fuel;

  • Buy it at retail and use it to create a mixture;

  • Separate it from a mixture; or

  • Use agri-biodiesel on which the small agri-biodiesel producer credit was claimed for a use not described under Qualified Agri-Biodiesel Production in the Instructions for Form 8864, Biodiesel, Renewable Diesel, or Sustainable Aviation Fuels Credit.

The tax is $1.00 per gallon of biodiesel, agri-biodiesel, and renewable diesel. An additional $.10 is added if the agri-biodiesel benefited from the small agri-biodiesel producer credit. Fill in the number of gallons and the appropriate rate in the Rate column on the line for IRS No. 117. If more than one rate applies, leave the Rate column blank and attach a schedule showing the rates and number of gallons taxed at each rate.

Floor Stocks Tax

Ozone-depleting chemicals floor stocks tax (IRS No. 20).

Use Form 6627 to figure the liability for this tax. Enter the amount from Form 6627, Part IV, line 4, column (d), on the line for IRS No. 20. Attach Form 6627 to the Form 720 that is due July 31 of each year.

Excise Tax on Repurchase of Corporate Stock

IRS No. 150.

No regulations have been issued requiring the reporting, nor payment, of this tax. Don’t report a liability on the line for IRS No. 150 until further notice. See Announcement 2023-18.

Sales of Designated Drugs During Statutory Periods

IRS No. 142.

Section 5000D imposes an excise tax on the sale by the manufacturer, producer, or importer of any designated drug during a day that falls within a period described in section 5000D(b). Under proposed regulations, REG-11669-23, (also see Notice 2023-52), you’ll be required to report any section 5000D drug tax liability on your Form 720.

These proposed regulations, once adopted as final regulations in a Treasury Decision (TD) published in the Federal Register, will apply to calendar quarters beginning on or after October 1, 2023. You may rely on these proposed regulations for your returns beginning on October 1, 2023 (4th quarter), and before the date the TD is published.

Since the TD may not be published timely by the January 31, 2024, due date of your 4th quarter return, you may be required to file Form 720-X, Amended Quarterly Federal Excise Tax Return, once the TD is published to report revisions to your originally reported section 5000D liability.

Part III

Line 4.

Report on Form 720, line 4, the total claims from Schedule C, line 15. See Schedule C. Claims , later.

Line 6.

Include on line 6 the amount from line 11 of your previous return that you applied to this return and the amount from Form 720-X, line 5b.

Note.

Include on line 6 of your next return the amount from line 11 you want to have applied to that return.

This is an Image: caution.gifIf you owe other federal tax, interest, or penalty, the overpayment on line 11 and line 7 will first be applied to the unpaid amounts.

Line 10.

If line 3 is more than line 9, enter the difference on line 10. You don't have to pay if line 10 is under $1.00.

You may pay the amount shown on line 10 by EFTPS, check or money order, or, if filing electronically, electronic funds withdrawal (direct debit). If you pay by EFTPS or direct debit, don't file Form 720-V.

This is an Image: caution.gifIf you don't deposit as required and, instead, pay the taxes with Form 720, you may be subject to a penalty.

Payment of Taxes

Generally, semimonthly deposits of excise taxes are required. A semimonthly period is the first 15 days of a month (the first semimonthly period) or the 16th through the last day of a month (the second semimonthly period).

However, no deposit is required for the situations listed below. The taxes are payable with the return.

  • The net liability for taxes listed on Form 720, Part I, doesn't exceed $2,500 for the quarter.

  • The gas guzzler tax is being paid on a one-time filing. See Gas guzzler tax (IRS No. 40), earlier.

  • The PCOR fee is being paid with a second quarter Form 720. See Patient-centered outcomes research (PCOR) fee (IRS No. 133) , earlier.

  • The liability is for taxes listed on Form 720, Part II, except the floor stocks tax, which generally requires a single deposit.

Special rule for deposits of taxes in September 2024.

If you are required to make deposits, see the chart below. The special rule doesn't apply to taxes not required to be deposited (see Payment of Taxes , earlier). See Regulations sections 40.6302(c)-2 and 40.6302(c)-3 for rules to figure the net tax liability for the deposits due in September.

Additional Deposit of Taxes in September 2024
Type of Tax For the period  
Beginning on Ending on Due Date
Regular method taxes Sept. 16 Sept. 26 Sept. 29
Alternative method taxes (IRS Nos. 22, 26, 27, and 28) (based on amounts billed) Sept. 1 Sept. 11 Sept. 29

This is an Image: caution.gifUsing the regular method: For the remaining days in September (27–30), make your deposits by the 14th day of October. Using the alternative method: For the remaining days in September (12–30), please see Pub. 509 for deposit dates.

How To Make Deposits

To avoid a penalty, make your deposits timely and don't mail your deposits directly to the IRS. Records of your deposits will be sent to the IRS for crediting to your accounts.

Electronic deposit requirement.

You must deposit all depository taxes (such as excise tax, employment tax, or corporate income tax) by electronic funds transfer.

Depositing on time.

For EFTPS deposits to be on time, you must initiate the transaction at least 1 day before the date the deposit is due (before 8:00 p.m. Eastern time).

If a deposit is due on a day that isn't a business day or legal holiday, see When To Make Deposits , later. The term “legal holiday” means any legal holiday in the District of Columbia.

Same-day wire payment option.

If you fail to submit a deposit transaction on EFTPS by 8:00 p.m. Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Collection Service (FTCS). To use the same-day wire payment method, you will need to make arrangements with your financial institution ahead of time. Please check with your financial institution regarding availability, deadlines, and costs. Your financial institution may charge you a fee for payments made this way. To learn more about the information you will need to provide your financial institution to make a same-day wire payment, go to IRS.gov/SameDayWire.

This is an Image: taxtip.gifYou will automatically be enrolled in EFTPS when you apply for an EIN. You will receive a separate mailing containing instructions for activating your EFTPS enrollment after you receive your EIN.

When To Make Deposits

There are two methods for determining deposits: the regular method and the alternative method.

The regular method applies to all taxes on Form 720, Part I, except for communications and air transportation taxes if deposits are based on amounts billed or tickets sold, rather than on amounts actually collected. See Alternative method (IRS Nos. 22, 26, 27, and 28) below.

If you are depositing more than one tax under a method, combine all the taxes under the method and make one deposit for the semimonthly period.

Regular method.

The deposit of tax for a semimonthly period is due by the 14th day following that period. Generally, this is the 29th day of a month for the first semimonthly period and the 14th day of the following month for the second semimonthly period. If the 14th or the 29th day falls on a Saturday, Sunday, or legal holiday, you must make the deposit by the immediately preceding day that isn't a Saturday, Sunday, or legal holiday.

Alternative method (IRS Nos. 22, 26, 27, and 28).

Deposits of communications and air transportation taxes may be based on taxes included in amounts billed or tickets sold during a semimonthly period instead of on taxes actually collected during the period. Under the alternative method, the tax included in amounts billed or tickets sold during a semimonthly period is considered collected during the first 7 days of the second following semimonthly period. The deposit of tax is due by the third business day after the seventh day of that period.

Example.

The tax included in amounts billed or tickets sold for the period June 16–30, 2024, is considered collected from July 16–22, 2024, and must be deposited by July 25, 2024.

To use the alternative method, you must keep separate accounts of the tax included in amounts billed or tickets sold during the month and report on Form 720 the tax included in amounts billed or tickets sold and not the amount of tax that is actually collected. For example, amounts billed in December, January, and February are considered collected during January, February, and March and are reported on Form 720 as the tax for the first quarter of the calendar year.

The separate account for each month must reflect:

  1. All items of tax included in amounts billed or tickets sold during the month, and

  2. Other items of adjustment relating to tax for prior months (within the statute of limitations on credits or refunds).

The separate account for any month can't include an adjustment resulting from a refusal to pay or inability to collect unless the refusal has been reported to the IRS. See Communications and Air Transportation Taxes—Uncollected Tax Report , earlier.

The net tax liability that is considered collected during the semimonthly period must be either:

  • The net amount of tax reflected in the separate account for the corresponding semimonthly period of the preceding month, or

  • One-half of the net amount of tax reflected in the separate account for the preceding month.

Amount To Deposit

Deposits of taxes for a semimonthly period must be at least 95% of the amount of net tax liability for that period, unless the safe harbor rule applies. See Safe Harbor Rule , later.

The net tax liability for a semimonthly period is the total liability for the period minus any claims allowed on Schedule C for the period. Net tax liability for a semimonthly period may be figured by dividing the net tax liability for the month by 2, provided this method of computation is used for all semimonthly periods in the calendar quarter.

This is an Image: caution.gifThe net tax liability for a semimonthly period isn't reduced by any amounts from Form 720-X.

Safe Harbor Rule

The safe harbor rule applies separately to deposits under the regular method and the alternative method. Persons who filed Form 720 for the lookback quarter (the second calendar quarter preceding the current quarter) are considered to meet the semimonthly deposit requirement if the deposit for each semimonthly period in the current quarter is at least 1/6 (16.67%) of the net tax liability reported for the lookback quarter.

For the semimonthly period for which the additional deposit is required (September 1–11 and 16–26), the additional deposit must be at least 11/90 (12.23%) of the net tax liability reported for the lookback quarter. Also, the total deposit for that semimonthly period must be at least 1/6 (16.67%) of the net tax liability reported for the lookback quarter.

Exceptions.

The safe harbor rule doesn't apply to the following quarters.

  • The first and second quarters beginning on or after the effective date of an increase in the rate of tax unless the deposit of taxes for each semimonthly period in the calendar quarter is at least 1/6 (16.67%) of the tax liability you would have had for the lookback quarter if the increased rate of tax had been in effect for that lookback quarter.

  • Any quarter if liability includes any tax not in effect throughout the lookback quarter.

  • For deposits under the alternative method, any quarter if liability includes any tax not in effect throughout the lookback quarter and the month preceding the lookback quarter.

Requirements to be met.

For the safe harbor rule to apply, you must pay any underpayment for the current quarter by the due date of the return and check the box on line 5 of Form 720.

This is an Image: caution.gifThe IRS may withdraw the right to make deposits of tax using the safe harbor rule from any person not complying with these rules.

Online Payment Agreement

If you can't pay the full amount of tax owed, you can apply for an installment agreement online. You can apply for an installment agreement online if the total amount you owe in combined tax, penalties, and interest is $25,000 ($50,000 for individuals) or less, and you've filed all required returns. To apply using the Online Payment Agreement Application, go to IRS.gov/OPA.

Schedule A. Excise Tax Liability

How to complete.

Complete Schedule A to record net tax liabilities for Form 720, Part I, taxes for each semimonthly period in a quarter even if your net liability is under $2,500.

The following table will help you determine which boxes to complete on Schedule A.

IF you are reporting under the... THEN you report on line... AND enter the net tax liability in boxes...
regular method 1 A–G.
alternative method 2 M–S.

If you are reporting more than one type of tax on
lines 1 and 2:

  1. Add the net tax liability for each tax for each semimonthly period, and

  2. Enter the total in the applicable box.

Additional rules.

Report communications and air transportation taxes based on:

  • Actual collections on line 1, or

  • Amounts billed or tickets sold on line 2. The amount of tax to report for a semimonthly period is the net amount that is considered collected during that period.

Example.

Under the alternative method, the amounts billed for communications services from June 1–15, 2024, are considered collected during the period July 1–7, 2024, and are reported for the third quarter of 2024 on Schedule A in box M, not the first quarter of 2024.

Reporting tax liability under the special September rule.

An additional reporting is required under the special September rule as follows.

Regular method taxes Enter the liability for the period beginning September 26/27 and ending September 30 in box F.
Alternative method taxes Enter the tax included in the amounts billed or tickets sold for the period beginning September 11/12 and ending September 15 in box M of the fourth quarter return. Enter the tax included in amounts billed or tickets sold during the period beginning September 16 and ending September 30 in box N of the fourth quarter return.

Schedule T. Two-Party Exchange Information Reporting

In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following occur.

  • The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator.

  • The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person.

  • The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO, Terminal Operator Report.

  • The transaction is the subject of a written contract.

Information reporting.

Schedule T is used to report gallons of taxable fuel:

  • Received in a two-party exchange within a terminal—these gallons must also be included on the appropriate line on Form 720, page 1; or

  • Delivered in a two-party exchange with a removal across the rack.

Enter all gallons of fuel received or delivered in a two-party exchange within a terminal for the applicable fuel.

Schedule C. Claims

Complete all information requested for each line, including Month your income tax year ends and Period of claim. Enter the month as “MM.” Enter the period of claim as “MM/DD/YYYY – MM/DD/YYYY.” Your claim will be disallowed if you don't follow the required procedures or don't provide all the required information. Also, you are certifying to the applicable statement(s) on Schedule C when you make a claim. See Pub. 510 for more information.

This is an Image: caution.gifYou must include in gross income (income tax return) the amount from line 4 of Form 720 if you took a deduction on the income tax return that included the amount of the taxes and that deduction reduced the income tax liability. See Pub. 510 for more information.

Don't use Schedule C:

  • If you aren't reporting a liability on Form 720, Part I or Part II;

  • For amounts you will claim or have claimed on Form 4136, Credit for Federal Tax Paid on Fuels, or as a refund on Form 8849, Claim for Refund of Excise Taxes, and its separate schedules;

  • To make adjustments to liability reported on Forms 720 filed for prior quarters (instead, use Form 720-X);

  • If you are seeking a refund of the surtax on any liquid used in a fractional ownership program aircraft as fuel (IRS No. 13) (instead, use Form 720-X); or

  • To request an abatement or refund of interest under section 6404(e) (due to IRS errors or delays) or an abatement or refund of a penalty or addition to tax under section 6404(f) (due to erroneous IRS written advice). Instead, use Form 843, Claim for Refund and Request for Abatement. Also, use Form 843 to request a refund of the penalty under section 6715 for misuse of dyed fuel.

Type of Use Table

The following table lists the nontaxable uses of fuels. You must enter the number from the table in the Type of use column as required.

No. Type of use
1 On a farm for farming purposes
2 Off-highway business use (for business use other than in a highway vehicle registered or required to be registered for highway use) (other than use in mobile machinery)
3 Export
4 In a boat engaged in commercial fishing
5 In certain intercity and local buses
6 In a qualified local bus
7 In a bus transporting students and employees of schools (school buses)
8 For diesel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway business use)
9 In foreign trade
10 Certain helicopter and fixed-wing aircraft uses
11 Exclusive use by a qualified blood collector organization
12 In a highway vehicle owned by the United States that isn't used on a highway
13 Exclusive use by a nonprofit educational organization
14 Exclusive use by a state, political subdivision of a state, or the District of Columbia
15 In an aircraft or vehicle owned by an aircraft museum
16 In military aircraft

Claim requirements for lines 1–6 and lines 14b–14d.

The following requirements must be met.

  1. The amount of the claim must be at least $750 (combining amounts on lines 1, 2, 3, 4, 5, 6, 14b, 14c, and 14d). This amount may be met by:

    1. Making a claim for fuel used during any quarter of a claimant's income tax year, or

    2. Aggregating amounts from any quarters of the claimant's income tax year for which no other claim has been made.

  2. Claims must be filed during the first quarter following the last quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

  3. Only one claim may be filed for any quarter.

  4. The fuel must have been used for a nontaxable use during the period of claim.

  5. The ultimate purchaser is the only person eligible to make the claim.

If requirements 1–3 above aren't met, see Annual Claims , later.

Exported taxable fuel.

The claim rates for exported taxable fuel are listed on lines 1b, 2c, 3e, and 4d, and in the instructions for lines 14b and 14c. Taxpayers making a claim for exported taxable fuel must include with their records proof of exportation. Proof of exportation includes:

  • A copy of the export bill of lading issued by the delivering carrier,

  • A certificate by the agent or representative of the export carrier showing actual exportation of the fuel,

  • A certificate of lading signed by a customs officer of the foreign country to which the fuel is exported, or

  • A statement of the foreign consignee showing receipt of the fuel.

Line 1. Nontaxable Use of Gasoline

Allowable uses.

The gasoline must have been used during the period of claim for type of use 2, 4, 5, 7, or 12. For exported gasoline, see Exported taxable fuel, earlier. Type of use 2 doesn't include any personal use or use in a motorboat.

Line 2. Nontaxable Use of Aviation Gasoline

Allowable uses.

For line 2b, the aviation gasoline must have been used during the period of claim for type of use 9, 10, or 16. For exported aviation gasoline, see Exported taxable fuel, earlier.

For line 2d, the aviation gasoline must have been used during the period of claim for type of use 9. This claim is made in addition to the claim made on line 2b for type of
use 9.

Line 3. Nontaxable Use of Undyed Diesel

This is an Image: caution.gifUltimate purchasers use line 3d to make claims for diesel used on a farm for farming purposes.

Allowable uses.

For line 3a, the diesel must have been used during the period of claim for type of use 2, 6, 7, 8, or 12. For exported undyed diesel, see Exported taxable fuel, earlier. Type of use 2 doesn't include any personal use or use in a motorboat. Type of use 8 includes use as heating oil and use in a motorboat.

Line 4. Nontaxable Use of Undyed Kerosene (Other Than Kerosene Used in Aviation)

Allowable uses.

For line 4a, the kerosene must have been used during the period of claim for type of use 2, 6, 7, 8, or 12. For exported undyed kerosene, see Exported taxable fuel, earlier. Type of use 2 doesn't include any personal use or use in a motorboat. Type of use 8 includes use as heating oil and use in a motorboat.

For lines 4e and 4f, the kerosene must have been used during the period of claim for type of use 2.

Line 5. Kerosene Used in Aviation

Claimant.

For lines 5a and 5b, the ultimate purchaser of kerosene used in commercial aviation (other than foreign trade) is eligible to make this claim. For lines 5c, 5d, and 5e, the ultimate purchaser of kerosene used in noncommercial aviation (except for nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) is eligible to make this claim. Claimant certifies that the right to make the claim hasn't been waived.

Allowable uses.

For lines 5a and 5b, the kerosene must have been used during the period of claim in commercial aviation. If the claimant buys kerosene partly for use in commercial aviation and partly for use in noncommercial aviation, see the rules in Notice 2005-80, section 3(e)(3).

For lines 5c and 5d, the kerosene must have been used during the period of claim for type of use 1, 9, 10, 11, 13, 15, or 16.

For line 5e, the kerosene must have been used during the period of claim for type of use 9. This claim is made in addition to the claim made on lines 5c and 5d for type of use 9.

Line 6. Nontaxable Use of Alternative Fuel

Claimant.

The ultimate purchaser of the taxed alternative fuel is the only person eligible to make this claim.

Allowable uses.

The alternative fuel must have been used during the period of claim for type of use 1, 2, 4, 5, 6, 7, 11, 13, 14, or 15.

Type of use 5.

Enter “Bus” in the space to the left of the Type of use column. Enter the correct claim rate in the Rate column. The claim rates for type of use 5 are listed below.

Line number Claim rate: Type of use 5
6a $.109*
6b .110
6c .109**
6d .110
6e .17
6f .17
6g .169***
6h .110
* This is the claim rate per GGE (5.75 pounds or 1.353 gallons of LPG).
** This is the claim rate per GGE (5.66 pounds or 123.57 cubic feet of CNG).
*** This is the claim rate per DGE (6.06 pounds or 1.71 gallons of LNG).

Type of use 5 example.

10,000 gallons of LPG ÷ 1.353 = 7,391 GGE x $.109 = $805.62 claim amount.

Information for Claims on Lines 7–11

Registration number.

To make an ultimate vendor claim on lines 7–11, you must be registered. Enter your registration number, including the prefix (for prefixes, see the instructions for Form 637, Application for Registration), on the applicable line for your claim. If you aren't registered, use Form 637 to apply for a registration number.

Required certificates or waivers.

The required certificates or waivers for lines 7–11 are listed in the line instructions and are available in Pub. 510.

Line 7a. Sales by Registered Ultimate Vendors of Undyed Diesel

Claimant.

For line 7a, the registered ultimate vendor of the diesel is the only person eligible to make this claim and has obtained the required certificate from the buyer and has no reason to believe any information in the certificate is false. See Model Certificate P in Pub. 510. Only one claim may be filed for any gallon of diesel.

Allowable sales.

The fuel must have been sold during the period of claim for the exclusive use by a state or local government (including essential government use by an Indian tribal government).

Claim requirements.

The following requirements must be met.

  1. The claim must be for diesel sold during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $200. To meet this minimum requirement, amounts from lines 7, 8, and 9 may be combined.

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

If requirements 1–3 above aren't met, see Annual Claims , later.

Registration number.

Enter your UV registration number in the space provided.

Information to be submitted.

For claims on line 7a, attach a separate sheet with the name and TIN of each governmental unit to whom the diesel was sold and the number of gallons sold to each.

Line 7b. Sales by Registered Ultimate Vendors of Undyed Diesel for Use in Certain Intercity and Local Buses

Claimant.

For line 7b, the registered ultimate vendor of the diesel is eligible to make a claim only if the buyer waives their right to make the claim by providing the registered ultimate vendor with an unexpired waiver. See Model Waiver N in Pub. 510. Only one claim may be filed for any gallon of diesel.

Claim requirements.

The following requirements must be met.

  1. The claim must be for diesel sold during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $200. To meet this minimum requirement, amounts from lines 7, 8, and 9 may be combined.

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

If requirements 1–3 above aren't met, see Annual Claims , later.

Registration number.

Enter your UB registration number in the space provided.

Lines 8a and 8b. Sales by Registered Ultimate Vendors of Undyed Kerosene (Other Than Kerosene Sold for Use in Aviation)

Claimant.

For line 8a, the registered ultimate vendor of the kerosene is the only person eligible to make this claim and has obtained the required certificate from the buyer and has no reason to believe any information in the certificate is false. See Model Certificate P in Pub. 510. For line 8b, claimant has a statement, if required, that contains the date of sale, the name and address of the buyer, and the number of gallons of kerosene sold to the buyer. For lines 8a and 8b, only one claim may be filed for any gallon of kerosene.

Allowable sales.

The fuel must have been sold during the period of claim:

  • For line 8a, use by a state or local government (including essential government use by an Indian tribal government); or

  • For line 8b, from a blocked pump.

Claim requirements.

The following requirements must be met.

  1. The claim must be for kerosene sold during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $100. To meet this minimum, amounts from lines 8 and 9 may be combined.

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

If requirements 1–3 above aren't met, see Annual Claims , later.

Registration number.

Enter your UV or UP registration number in the space provided.

Information to be submitted.

For claims on line 8a, attach a separate sheet with the name and TIN of each governmental unit to whom the kerosene was sold and the number of gallons sold to each.

Line 8c. Sales by Registered Ultimate Vendors of Undyed Kerosene for Use in Certain Intercity and Local Buses

Claimant.

For line 8c, the registered ultimate vendor of the kerosene is eligible to make a claim only if the buyer waives their right to make the claim by providing the registered ultimate vendor with an unexpired waiver. See Model Waiver N in Pub. 510. Only one claim may be filed for any gallon of kerosene.

Claim requirements.

The following requirements must be met.

  1. The claim must be for kerosene sold during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $100. To meet this minimum, amounts from lines 8 and 9 may be combined.

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

If requirements 1–3 above aren't met, see Annual Claims , later.

Registration number.

Enter your UB registration number in the space provided.

Lines 9a and 9b. Sales by Registered Ultimate Vendors of Kerosene for Use in Commercial Aviation (Other Than Foreign Trade)

Claimant.

The registered ultimate vendor of the kerosene sold for use in commercial aviation is eligible to make this claim only if the buyer waives their right by providing the registered ultimate vendor with an unexpired waiver. See Model Waiver L in Pub. 510. Only one claim may be filed for any gallon of kerosene sold for use in commercial aviation.

Allowable sales.

The kerosene sold for use in commercial aviation must have been sold during the period of claim for use in commercial aviation (other than foreign trade).

Claim requirements.

The following requirements must be met.

  1. The claim must be for kerosene sold for use in commercial aviation during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $100. To meet this minimum, amounts from lines 8 and 9 may be combined.

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

If requirements 1–3 above aren't met, see Annual Claims , later.

Registration number.

Enter your UA registration number in the space provided.

Lines 9c, 9d, 9e, and 9f. Sales by Registered Ultimate Vendors of Kerosene Sold for Use in Noncommercial Aviation

Claimant.

For line 9c, the registered ultimate vendor of the kerosene sold for use in nonexempt, noncommercial aviation is the only person eligible to make this claim, and the registered ultimate vendor has obtained the required certificate from the ultimate purchaser. See Model Certificate Q in Pub. 510. For lines 9d, 9e, and 9f, the registered ultimate vendor of the kerosene sold for nontaxable use in noncommercial aviation (foreign trade for line 9f) is eligible to make this claim only if the buyer waives their right to make the claim by providing the registered ultimate vendor with an unexpired waiver. See Model Waiver L in Pub. 510. For type of use 14, see Model Certificate P in Pub. 510. Only one claim may be filed for any gallon of kerosene sold for use in noncommercial aviation.

Allowable sales.

For line 9c, the kerosene must have been sold for a nonexempt use in noncommercial aviation. For lines 9d and 9e, the kerosene sold for use in noncommercial aviation must have been sold during the period of claim for type of use 1, 9, 10, 11, 13, 14, 15, or 16.

For line 9f, the kerosene sold for use in noncommercial aviation must have been sold during the period of claim for type of use 9. This claim is made in addition to the claim made on lines 9d and 9e for type of use 9.

Claim requirements.

The following requirements must be met.

  1. The claim must be for kerosene sold for use in noncommercial aviation during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $100. To meet this minimum, amounts from lines 8 and 9 may be combined.

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

If requirements 1–3 above aren't met, see Annual Claims , later.

Registration number.

Enter your UA (UV if type of use 14) registration number in the space provided.

Information to be submitted.

For claims on lines 9d and 9e (type of use 14), attach a separate sheet with the name and TIN of each governmental unit to whom the kerosene was sold and the number of gallons sold to each.

Lines 10 and 11. Sales by Registered Ultimate Vendors of Gasoline and Aviation Gasoline

Claimant.

The registered ultimate vendor of the gasoline or aviation gasoline is eligible to make a claim on lines 10 and 11 if the buyer waives their right to make the claim by providing the registered ultimate vendor with an unexpired certificate. See Model Certificate M in Pub. 510. Only one claim may be filed for any gallon of gasoline or aviation gasoline.

Allowable sales.

The gasoline or aviation gasoline must have been sold during the period of claim for:

  • Use by a nonprofit educational organization, or

  • Use by a state or local government (including essential government use by an Indian tribal government).

Claim requirements.

The following requirements must be met.

  1. The claim must be for gasoline or aviation gasoline sold or used during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $200. To meet this minimum, amounts from lines 10 and 11 may be combined.

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for January and February is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

Registration number.

Enter your UV registration number in the space provided.

Information to be submitted.

For claims on lines 10 and 11, attach a separate sheet with the name and TIN of each nonprofit educational organization or governmental unit to whom the gasoline or aviation gasoline was sold and the number of gallons sold to each.

Line 12 a–c. Biodiesel or Renewable Diesel Mixtures

Claimant.

The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. The credit is based on the gallons of biodiesel or renewable diesel in the mixture.

How to claim the credit.

Any biodiesel or renewable diesel mixture credit must first be claimed on Form 720, Schedule C, to reduce your taxable fuel liability reported on Form 720. Any excess credit may be claimed on Form 720, Schedule C; Schedule 3 (Form 8849); Form 4136; or Form 8864. See Notice 2005-4 and item 4 below for more information. Only one credit may be taken for each amount of biodiesel or renewable diesel. If you claimed (or will claim) an amount of biodiesel or renewable diesel on Form 8864, Form 8849, or Form 4136 for a credit or payment, then you can't make a claim on Form 720 for that same amount of biodiesel or renewable diesel.

The biodiesel mixture credit may not be claimed for biodiesel produced outside the United States for use as a fuel outside the United States. The United States includes any territory of the United States. Requirements 1 and 2 must be met only if the credit exceeds the amount of taxable fuel liability reported. If requirements 1 and 2 below are not met, see Annual Claims, later. Requirements 3 and 4 below must be met for all claims.

  1. The claim must be for a biodiesel or renewable diesel mixture sold or used during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $200. To meet this minimum, amounts from lines 12 and 13 may be combined.

  3. The biodiesel used to produce the biodiesel mixture must meet ASTM D6751 and meet the EPA’s registration requirements for fuels and fuel additives under section 211 of the Clean Air Act. The renewable diesel used to produce the renewable diesel mixture must be derived from biomass, meet ASTM D975, D396, or other equivalent standard approved by the IRS, and meet the EPA’s registration requirements for fuels and fuel additives under section 211 of the Clean Air Act.

  4. The Certificate for Biodiesel and, if applicable, Statement of Biodiesel Reseller must be attached to the first claim filed that is supported by the certificate or statement. For the renewable diesel mixture credit, you must edit the certificate and, if applicable, statement to indicate that the fuel to which the certificate and statement relate is renewable diesel and state that the renewable diesel meets the requirements discussed above under requirement 3. See Model Certificate O and Model Statement S in Pub. 510. If the certificate and statement aren’t attached to Form 720 because they’re attached to a previously filed claim on Schedule 3 (Form 8849), attach a separate statement with the following information.

    1. Certificate identification number.

    2. Total gallons of biodiesel or renewable diesel on certificate.

    3. Total gallons claimed on Schedule 3 (Form 8849).

    4. Total gallons claimed on Form 720, Schedule C, line 12.

    5. Total gallons claimed on Form 8864.

Registration number.

If you are a registered blender or a taxable fuel registrant, enter your registration number on line 12.

Line 12d. Sustainable Aviation Fuel (SAF) Credit

Claimant.

The person that produced and sold or used a qualified mixture (a mixture of SAF and kerosene) is the only person eligible to make this claim. The credit is based on the gallons of SAF in the qualified mixture. Any SAF mixture credit must first be claimed on Form 720, Schedule C, to reduce your taxable fuel liability reported on Form 720. Any excess credit must be claimed on Form 720, Schedule C; Schedule 3 (Form 8849); Form 4136; or Form 8864. See item 4 below for more information.

How to claim the credit.

Only one credit may be taken for each amount of SAF. If a person claimed (or will claim) an amount of SAF on Form 8864, Form 8849, or Form 4136 for a credit or payment, then a claim can't be made on Form 720 for that same amount of SAF. The qualified mixture must be used (or sold, in the ordinary course of a trade or business, for use) in an aircraft.

The SAF credit can't be claimed for qualified mixtures produced outside the United States or if the transfer of such mixture to the fuel tank of an aircraft occurs outside the United States. Requirements 1 and 2 below must be met only if the credit exceeds the amount of taxable fuel liability reported. If requirements 1 and 2 below are not met, see Annual Claims, later. Requirements 3 and 4 below must be met for all claims.

  1. The claim must be for a qualified mixture sold or used during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $200. To meet this minimum, amounts from lines 12 and 13 may be combined.

  3. The SAF used to produce the qualified mixture is the portion of liquid fuel that is not kerosene that (i) either (A) meets the specifications of one of the ASTM D7566 Annexes, or (B) meets the specifications of ASTM D1655 Annex A1; (ii) is not derived from coprocessing an applicable material (or materials derived from an applicable material) with a feedstock that is not biomass; (iii) is not derived from palm fatty acid distillates or petroleum; and (iv) has been certified in accordance with section 40B(e) as having a lifecycle greenhouse gas emissions reduction percentage of at least 50%. Applicable material means monoglycerides, diglycerides, and triglycerides; free fatty acids; and fatty acid esters. Lifecycle greenhouse gas emissions reduction percentage means the percentage reduction in lifecycle greenhouse gas emissions achieved by such fuel as compared with petroleum-based jet fuel, as defined in accordance with the most recent Carbon Offsetting and Reduction Scheme for International Aviation which has been adopted by the International Civil Aviation Organization with the agreement of the United States, or any similar methodology which satisfies the criteria under section 211(o)(1)(H) of the Clean Air Act.

  4. For qualified mixtures produced with a SAF synthetic blending component (SAF that meets the qualifications of an ASTM D7566 Annex), the Certificate for SAF Synthetic Blending Component, Statement of SAF Synthetic Blending Component Reseller (if applicable), and Declaration for SAF Qualified Mixture must be attached to the first claim filed that is supported by the certificate or statement. If the certificate, statement, and declaration aren't attached to Form 720 because they're attached to a previously filed claim on a Form 4136, a Form 8864, or a Schedule 3 (Form 8849), attach a separate statement with the following information.

    1. Certificate identification number.

    2. Total gallons of SAF synthetic blending component, on the certificate.

    3. Total gallons claimed on Schedule 3 (Form 8849).

    4. Total gallons claimed on Form 4136.

    5. Total gallons claimed on Form 8864.

  5. Enter the number of gallons and the appropriate rate in the Rate column on line 12d. If more than one rate applies, leave the Rate column blank and attach a schedule showing the rates and number of gallons claimed at each rate. Enter the claim amount on line 12d.

Registration number.

If you're a registered blender or a taxable fuel registrant, enter your registration number on line 12.

Line 13. Alternative Fuel Credit and Alternative Fuel Mixture Credit

Claimant.

For the alternative fuel credit, the registered alternative fueler who (1) sold an alternative fuel at retail and delivered it into the fuel supply tank of a motor vehicle or motorboat; (2) sold an alternative fuel, delivered it in bulk for taxable use in a motor vehicle or motorboat, and received the required statement from the buyer; (3) used an alternative fuel (not sold at retail or in bulk as previously described) in a motor vehicle or motorboat; or (4) sold an alternative fuel for use as a fuel in aviation, or used the alternative fuel in aviation, is the only person eligible to make this claim.

For the alternative fuel mixture credit, the registered alternative fueler that produced and sold or used the mixture as a fuel in their trade or business is the only person eligible to make this claim. The credit is based on the gallons of alternative fuel in the mixture.

Carbon capture requirement.

A credit for Fischer-Tropsch process liquid fuel from coal (including peat) can be claimed only if the fuel is from coal produced at a gasification facility that separates and sequesters at least 75% of the facility's total carbon dioxide emissions.

How to claim the credit.

Any alternative fuel credit must first be claimed on Form 720, Schedule C, to reduce your section 4041 taxable fuel liability for alternative fuel and CNG reported on Form 720. Any excess credit may be claimed on Form 720, Schedule C; Schedule 3 (Form 8849); or Form 4136.

The alternative fuel mixture credit can be claimed only on Form 720, Schedule C, not on Form 4136, or Schedule 3 (Form 8849), and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel, and kerosene. Calculate the limitation for alternative fuel mixtures separately and enter on line 13 only the gallons of mixtures that don’t exceed your section 4081 taxable fuel liability for gasoline, diesel, and kerosene.

Claim requirements.

The alternative fuel credit and alternative fuel mixture credit may not be claimed for alternative fuel produced outside the United States for use as a fuel outside the United States. The United States includes any territory of the United States. To claim either credit, you must be registered by the IRS.

Registration number.

You must enter your registration number in the space provided.

Form 720-X.

If you are not registered, you cannot make a claim at this time. Use Form 637 to apply for registration. After you are registered by the IRS, file Form 720-X to claim the credit for this period.

Line 14. Other Claims

For claims under section 6416(b)(2) relating to certain uses and resales of certain articles subject to manufacturer or retailer excise taxes, claimant certifies that it sold the article at a tax-excluded price, repaid the amount of tax to the ultimate vendor, or has obtained the written consent of the ultimate vendor to make the claim; and has the required supporting information.

Lines 14b and 14c. Exported Dyed Diesel, Exported Dyed Kerosene, and Exported Gasoline Blendstocks Taxed at $.001

This is an Image: caution.gifClaimant is required to have the name and address of the person(s) who sold the fuel to the claimant, the dates of purchase, and, if exported, the required proof of export.

A claim may be made for dyed diesel or dyed kerosene exported in a trade or business during the period of claim. Claims for exported gasoline blendstocks taxed at $.001 per gallon are made on line 14b. See Exported taxable fuel , earlier. The claim rate for each fuel is $.001 per gallon.

This is an Image: caution.gifClaims for exported gasoline blendstocks taxed at $.184 per gallon are made on line 1b.

Line 14d. Diesel-Water Emulsion

Generally, the claim rate for the nontaxable use of a diesel-water emulsion taxed at $.198 (credit reference number (CRN) 309) is $.197. The fuel must have been used during the period of claim for type of use 1, 2, 3, 5, 6, 7, 8, or 12. For type of use 5, the claim rate is $.124 (CRN 309). For type of use 3 (exported), the claim rate is $.198 (CRN 306) and is reported on line 14d.

The claim rate for undyed diesel taxed at $.244 (CRN 310) and used to produce a diesel-water emulsion is $.046 per gallon of diesel so used (blender claims). The claimant must attach a statement certifying that (a) the claimant produced a diesel-water emulsion containing at least 14% water; (b) the emulsion additive is registered by a U.S. manufacturer with the EPA under the Clean Air Act, section 211 (as in effect on March 31, 2003); (c) the claimant used undyed diesel taxed at $.244 to produce the diesel-water emulsion; and (d) the claimant sold or used the diesel-water emulsion in the blender's trade or business. The blender claimant must be registered by the IRS and must enter their registration number on line 14d and enter the applicable CRN.

Claim requirements.

See Claim requirements for lines 1–6 and lines 14b–14d , earlier.

Line 14e. Registered Credit Card Issuers

Allowable sales.

The gasoline (CRN 362), aviation gasoline (CRN 324), diesel (CRN 360), kerosene (CRN 346), or kerosene for use in aviation (CRN 369) must have been purchased with a credit card issued to the ultimate purchaser during the period of claim:

  • For gasoline or aviation gasoline, for the exclusive use by a state or local government (including essential government use by an Indian tribal government) or for the exclusive use of a nonprofit educational organization; or

  • For diesel, kerosene, or kerosene for use in aviation, for the exclusive use by a state or local government (including essential government use by an Indian tribal government).

Claimant.

The registered credit card issuer is the only person eligible to make this claim if the credit card issuer:

  1. Is registered by the IRS;

  2. Hasn't collected the amount of tax from the ultimate purchaser or has obtained the written consent of the ultimate purchaser to make the claim;

  3. Certifies that it has repaid or agreed to repay the amount of tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to make the claim, or has otherwise made arrangements which directly or indirectly provide the ultimate vendor with reimbursement of the tax; and

  4. Has in its possession an unexpired certificate from the ultimate purchaser and has no reason to believe any of the information in the certificate is false. See Model Certificate R in Pub. 510.

If any one of these conditions isn't met, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser can make the claim.

Claim requirements.

The following requirements must be met.

  1. The claim must be for gasoline, aviation gasoline, diesel, kerosene, or kerosene for use in aviation sold during a period that is at least 1 week. This requirement will generally be met for quarterly claims filed on Form 720.

  2. The amount of the claim must be at least $200 ($100 for kerosene or kerosene for use in aviation).

  3. Claims must be filed by the last day of the first quarter following the earliest quarter of the claimant's income tax year included in the claim. For example, a calendar year income taxpayer's claim for the first quarter is due June 30 if filed on Form 8849. However, Form 720 must be filed by April 30.

  4. The claimant must enter its registration number on line 14e, the amount of the claim, and the applicable CRN (see Allowable sales, earlier). If the claim is for more than one fuel, use the blank lines 14i–14k, or attach a separate sheet listing the fuels, amounts, and CRNs.

If requirements 1–3 above aren't met, see Annual Claims, later. However, annual claims can't be made for gasoline and aviation gasoline.

Claim rates.

The claim rates are shown below.

CRN Claim Rate
324 $.193
346 .243
360 .243
362 .183
369 .218

Annual Claims

If a claim on lines 1–9 or 14b–14e wasn’t made for any gallons, an annual claim may be made (exception: alternative fuel mixtures produced after December 31, 2011). Generally, an annual claim is made on Form 4136 for the income tax year during which the fuel was used by the ultimate purchaser, sold by the registered ultimate vendor, used to produce a mixture, or used in mobile machinery. See Form 4136 for more information.

Lines 14f–14h. Tire Credits

A credit or refund (without interest) is allowable on tax-paid tires if the tires have been:

  • Exported;

  • Sold to a state or local government for its exclusive use;

  • Sold to a nonprofit educational organization for its exclusive use;

  • Sold to a qualified blood collector organization for its exclusive use in connection with a vehicle the organization certifies will be primarily used in the collection, storage, or transportation of blood;

  • Used or sold for use as supplies for vessels; or

  • Sold in connection with qualified intercity, local, or school buses.

Also, a credit or refund (without interest) is allowable on tax-paid tires sold by any person on, or in connection with, any other article that is sold or used in an activity listed above.

The person who paid the tax is eligible to make the claim and must include:

  • A detailed description of the claim,

  • Any additional information required by the regulations,

  • How the claim amount was figured,

  • Any other information to support the claim, and

  • The number of tires claimed for each CRN.

Claim requirement.

Generally, the claim must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later.

Lines 14i–14k. Other Claims

This is an Image: caution.gifDon't use lines 14i–14k to make communications tax claims for nontaxable service. See Communications Taxes, earlier.

Use lines 14i–14k for claims relating to taxes listed in the table under Claim requirement below. See Pub. 510 for information on allowable claims relating to these taxes. If you need additional space, attach another sheet(s). You must include the following information for each claim.

  • A detailed description of the claim.

  • Any additional information required by the regulations.

  • The amount of the claim.

  • How you figured the claim amount.

  • Any other information to support the claim.

Claim requirement.

Generally, the claim must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later.

Tax CRN
Ozone-depleting chemicals (ODCs) 398
Chemicals (other than ODCs) 454
Imported chemical substances 317
ODC tax on imported products 349
Truck, trailer, and semitrailer chassis and bodies, and tractors 383
Passenger vehicles (luxury tax) 392
Gas guzzler automobiles 340
Vaccines 397
Sport fishing equipment 341
Fishing rods and fishing poles 308
Fishing tackle boxes 387
Electric outboard motors 342
Bows, quivers, broadheads, and points 344
Arrow shafts 389

The Taxpayer Advocate Service (TAS) Is Here To Help You

What is TAS?

TAS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Their job is to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights.

How can you learn about your taxpayer rights?

The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS. Go to TaxpayerAdvocate.IRS.gov to help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them.

What can TAS do for you?

TAS can help you resolve problems that you can't resolve with the IRS. And their service is free. If you qualify for their assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if:

  • Your problem is causing financial difficulty for you, your family, or your business;

  • You face (or your business is facing) an immediate threat of adverse action; or

  • You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised.

How can you reach TAS?

TAS has offices in every state, the District of Columbia, and Puerto Rico. Your local advocate's number is in your local directory and at TaxpayerAdvocate.IRS.gov/Contact-Us. You can also call them at 877-777-4778.

How else does TAS help taxpayers?

TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to them at IRS.gov/SAMS.

Instructions for Form 720 - Notices

Privacy Act and Paperwork Reduction Act Notice.

We ask for the information on these forms in order to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. Miscellaneous excise taxes are imposed under Subtitle D of the Internal Revenue Code. These forms are used to determine the amount of tax that you owe. Section 6011 requires you to provide the requested information. Section 6109 requires you to provide your identifying number. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and territories for use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. Failure to provide this information in a timely manner or providing false or fraudulent information may subject you to penalties.

You aren't required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

The time needed to complete and file these forms and related schedules will vary depending on individual circumstances. The estimated average times are:

Form Recordkeeping Learning about
the law or
the form
Preparing, copying, assembling, and
sending the
form to the IRS
720   8 hr., 59 min. 1 hr., 5 min.   2 hr., 3 min.
720-X   6 hr., 13 min. 0 hr., 18 min.   0 hr., 24 min.
Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions. You can send us comments through IRS.gov/FormComments. Or you can write to:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW
IR-6526
Washington, DC 20224
Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments and suggestions as we revise our tax forms, instructions, and publications. Do not send tax questions, tax returns, or payments to the above address.

Ordering forms and publications. Go to IRS.gov/Forms to download forms and publications. Otherwise, you can go to IRS.gov/OrderForms to order forms. Call 800-829-3676 to order prior-year forms and instructions. The IRS will process your order for forms and publications as soon as possible. Do not resubmit requests you’ve already sent us. You can get forms and publications faster online.

Instructions for Form 720 - Additional Material

Index

A

Address, Name and, Name and Address
Air transportation
Uncollected tax report, Communications and Air Transportation Taxes—Uncollected Tax Report
Air transportation taxes, Air Transportation Taxes
Alternative fuel, Alternative fuel (IRS Nos. 112, 118, and 120–124).
Amount to deposit, Amount To Deposit
Arrow shafts, Arrow shafts (IRS No. 106).

B

Biodiesel sold as but not used as fuel, Biodiesel sold as, but not used as, fuel (IRS No. 117).
Bows, quivers, broadheads, and points, Bows, quivers, broadheads, and points (IRS No. 44).

D

Deposits, How to make, How To Make Deposits
Diesel, Diesel (IRS No. 60).
Diesel-water emulsion, Diesel-water emulsion (IRS No. 104).

E

Electric outboard motors, Electric outboard motors (IRS No. 42).
Employer identification number, Employer Identification Number (EIN)
Environmental taxes, Environmental Taxes
Exported taxable fuel, Exported taxable fuel.

F

Final return, Final Return
Fishing rods and fishing poles, Fishing rods and fishing poles (IRS No. 110).
Fishing tackle boxes, Fishing tackle boxes (IRS No. 114).
Floor stocks, Floor Stocks Tax
Foreign insurance policies, Foreign Insurance Taxes
Form 6197, Gas guzzler tax (IRS No. 40).
Form 6627, Environmental Taxes
Form 720-V, Line 10.
Fuel taxes, Fuel Taxes

G

Gas guzzler automobiles
One-time filing, Gas guzzler tax (IRS No. 40).
Gasoline, Gasoline (IRS No. 62).

H

Help, additional, Additional Information
How to file
Zero tax, How To File

I

Indoor tanning services, Indoor Tanning Services Tax
Inland waterways fuel use tax, Inland waterways fuel use tax (IRS No. 64).
Interest, Penalties and, Penalties and Interest

M

Manufacturers taxes, Manufacturers Taxes

N

Name and address, Name and Address

O

Obligations not in registered form, Obligations not in registered form (IRS No. 31).
ODCs, Floor Stocks Tax
One-time filing, One-time filing.
Other fuels, tax rates, Other fuels (IRS No. 79).

P

Patient-centered outcomes research fee, Part II
Payment of taxes, Payment of Taxes
Payment voucher, Line 10.
Penalties and interest, Penalties and Interest

R

Recordkeeping, Recordkeeping
Retail tax, Retail Tax

T

Tanning services, Indoor, Indoor Tanning Services Tax
Taxable tires, Taxable tires (IRS Nos. 108, 109, and 113).
Taxes, Payment of, Payment of Taxes
Third Party Designee, Third Party Designee
Tire credit, Section 4051(d), Section 4051(d) tire credit.
Tires, taxable, Taxable tires (IRS Nos. 108, 109, and 113).
Transportation by water, Transportation by water (IRS No. 29).
Trucks, trailers, tractors, Truck, Trailer, and Semitrailer Chassis and Bodies, and Tractors (IRS No. 33)
Two-Party Exchange Information Reporting, Schedule T. Two-Party Exchange Information Reporting

W

When to deposit, When To Make Deposits
When to file, When To File
Where to file, Where To File