Excise tax

Excise taxes are taxes imposed on certain goods, services, and activities. Taxpayers include importers, manufacturers, retailers, and consumers, and vary depending on the specific tax. Excise taxes may be imposed at the time of:

• Entry into the United States, or sale or use after importation
• Sale or use by the manufacturer
• Sale or use by the retailer
• Use by the consumer

On this page

• Recent tax law updates
• Registration for certain excise tax activities
• Filing excise tax returns
• Types of excise taxes
• Excise tax credits and refunds
• Excise Summary Terminal Activity Reporting System (ExSTARS)

Recent tax law updates

Dyed fuel claims

The One, Big, Beautiful Bill Act (Public Law 119-21, 139 Stat. 72, 282) added section 6435 to the Internal Revenue Code to allow a claim for payment, without interest, equal to the amount of federal excise tax previously paid on clear diesel fuel or kerosene that is later indelibly dyed and removed at a terminal for a nontaxable use. Section 6435 applies to eligible dyed diesel fuel and kerosene removed on or after December 31, 2025.

Excise tax on certain remittance transfers

Beginning January 1, 2026, remittance transfer providers must:

• Collect the 1% excise tax on applicable remittance transfers when the sender pays with certain specified instruments.
• Make semimonthly deposits.
• File Form 720 quarterly returns with the IRS.

Clean fuel production credit

Internal Revenue Code section 45Z, as amended by the One, Big, Beautiful Bill Act (Public Law 119-21, 139 Stat. 72), provides an income tax credit for clean transportation fuel (clean fuel production credit) produced after December 31, 2024, and sold by December 31, 2029. Section 45Z generally allows an income tax credit for the domestic production of clean transportation fuel, which is divided into two broad categories of fuel: sustainable aviation fuel (SAF) and non-SAF transportation fuel. A taxpayer cannot claim a clean fuel production credit unless the taxpayer is registered as a producer of clean fuel at the time of production. To claim a clean fuel production credit, file Form 7218, Clean Fuel Production Credit, with your income tax return.

Excise fuel incentive credits expired

Several excise fuel incentive credits were extended through December 31, 2024. Effective January 1, 2026, these excise fuel incentive credits have expired, except the small agri-biodiesel producer credit, which was extended through December 31, 2026, by the One, Big, Beautiful Bill Act.

Excise tax on repurchase of corporate stock

Section 4501 imposes a 1% excise tax on the repurchase of corporate stock by certain publicly traded corporations or their specified affiliates effective for repurchases after Dec. 31, 2022. TD 10037 & TD 10002 provide definitions and special rules relating to the new excise tax. You can find additional details on how to file a return and pay the tax, including when stock repurchases may prompt liability for the excise tax, in the Form 7208, Excise Tax on Repurchase of Corporate Stock, instructions.

Petroleum tax - Crude oil exports; reinstatement of hazardous substance superfund financing rate

Internal Revenue Code section 4611(b) imposes a tax on certain domestic crude oil exports. As a result of a recent court case and the IRS' acquiescence in the court’s decision, the section 4611(b) tax no longer applies to crude oil exports.

The Hazardous Substance Superfund financing rate applies to taxable sales or uses occurring on or after January 1, 2023.

Oil Spill Liability Trust Fund financing rate expiration

Internal Revenue Code section 4611(a) imposes a tax on certain crude oil and petroleum products at the rate specified in section 4611(c). Section 4611(c)(1) provides that the rate of the section 4611 tax is the sum of the Hazardous Substance Superfund financing rate (Superfund tax rate) and the Oil Spill Liability Trust Fund financing rate (OSLTF tax rate). Section 4611(f)(2) provides that the OSLTF tax rate shall not apply after December 31, 2025. As a result, beginning January 1, 2026, the section 4611 tax rate includes only the Superfund tax rate, unless the OSLTF tax rate is later extended. See Announcement 2026-2 PDF for an explanation of this change.

Sustainable aviation fuel credit

The sustainable aviation fuel (SAF) credit applies to certain fuel mixtures that contain sustainable aviation fuel sold or used after December 31, 2022, and before January 1, 2025. Credits under Internal Revenue Code sections 40B and 6427(e) expired for sales or uses after December 31, 2024. The credit under section 6426(k) for sustainable aviation fuel mixtures expired for sales or uses after September 30, 2025.

Superfund chemical excise taxes reinstated

The Infrastructure Investment and Jobs Act (Public Law 117-58, 135 Stat. 429) reinstated the excise taxes on certain chemicals and chemical substances, with certain modifications, effective July 1, 2022. The taxes had previously expired in 1995.

Registration for certain excise tax activities

If you want to engage in or receive benefits from many activities subject to federal excise tax, you must be registered with us first.

• Register for excise tax activities
• Confirm a valid registration number

Filing excise tax returns

To report your excise tax liability, you must:

1. Complete Form 720, Quarterly Federal Excise Tax Return.
2. File Form 720 electronically for immediate acknowledgement of receipt and faster service with an IRS-approved software provider.
3. Some Form 720 filers must make semi-monthly deposits in addition to reporting excise tax liability on Form 720.

Types of excise taxes

See Publication 510, Excise Taxes.

Heavy highway vehicle use tax

Highway use tax is imposed on the use of any highway motor vehicle that, together with the semitrailer or trailer customarily used with such a vehicle, has a taxable gross weight of 55,000 pounds or more. The person in whose name the highway motor vehicle is registered, or is required to be registered, under the law of the registering state (or contiguous foreign country) must file Form 2290, Heavy Highway Vehicle Use Tax Return, and pay the tax. See When to File Form 2290 for more details about filing deadlines.

Sport fishing and archery excise tax

This tax applies to sport fishing equipment and archery equipment. The manufacturer, producer or importer of the sport fishing or archery equipment is responsible for paying the excise tax. Individuals may be responsible for paying the tax and filing an excise tax return if they purchased sport fishing and archery equipment from outside of the United States, including through online purchases directly from foreign manufacturers or sellers. The money helps fund conservation and wildlife restoration.

Sports wagering and occupational taxes

There are excise taxes imposed on accepting certain wagers and for being in the business of accepting wagers for yourself or on behalf of somebody else. Information on the wagering and occupational taxes may be found in the instructions for Form 730, Monthly Tax Return for Wagers, and Form 11-C, Occupational Tax and Registration Return for Wagering.

Excise tax credits and refunds

Claims may be filed for credits or refunds relating to certain excise taxes and activities. To claim a credit or refund complete Form 720, Quarterly Federal Excise Tax Return, Schedule C, or Form 8849, Claim for Refund of Excise Taxes. For more information see Publication 510, Excise Taxes.

Excise Summary Terminal Activity Reporting System (ExSTARS)

ExSTARS is a fuel reporting system developed with the cooperation of the IRS, Department of Transportation, state governments, and the motor fuel industry, which details the movement of any product into or out of an IRS approved terminal. A facility control number (FCN) designates a storage location within the motor fuel distribution, renewable fuel production or the bulk transfer / terminal systems.