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

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Recent tax law updates

Excise tax on repurchase of corporate stock

The Inflation Reduction Act of 2022 created a new 1% excise tax on the repurchase of corporate stock by certain publicly traded corporations or their specified affiliates effective for repurchases after December 31, 2022. REG-118499-23 and REG-115710-22 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 PDF instructions.  

Excise tax on coal

The Inflation Reduction Act of 2022 (Public Law 117-169, 136 Stat. 1818) made permanent higher tax rates under section 4121 of the Internal Revenue Code. That provision funds the Black Lung Disability Trust Fund. Producers of coal in the United States are liable for the excise tax imposed on the first sale or use of coal.

Fuel tax credits extended

The Inflation Reduction Act of 2022 extended several fuel tax credits through December 31, 2024.

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 Inflation Reduction Act of 2022 reinstates the Hazardous Substance Superfund financing rate, effective January 1, 2023.

Sustainable aviation fuel credit

The Inflation Reduction Act of 2022 created the sustainable aviation fuel (SAF) credit. The credit applies to certain fuel mixtures that contain sustainable aviation fuel sold or used after December 31, 2022, and before January 1, 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.

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.

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 and Form 11-C.

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 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, renewable fuel production or the bulk transfer / terminal system. Information regarding the use of FCNs was made public by an announcement in the Federal Register on April 12, 2010.

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