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Accounting Information > IRS Tax Forms > Form 720 Quarterly Federal Excise Tax Return

Form 720 - Quarterly Federal Excise Tax Return

            Form 720 is used to report and pay the liability for excise taxes quarterly.  The return for the first quarter is due on or before April 30, for the second quarter due July 31, for the third quarter October 31, and for the fourth quarter January 31.  If any of these due dates are on a weekend or a legal holiday, the due date is changed to the next business day.

             Part I of Form 720 is used to figure and report federal excise taxes on several different categories.  These include environmental taxes, communications taxes, air transportation taxes, fuel taxes, retail tax, ship passenger tax, manufacturers taxes, and foreign insurance taxes.


             For environmental taxes, Form 6627 would be used to compute the environmental taxes on oil spill liability, ozone-depleting chemicals, imported products that used ozone-depleting chemicals in production or manufacture, and the floor stocks tax on ozone-depleting chemicals.  For communications taxes, the receiver of the payment for communications services collects and pays the tax and files the return. 

             In regards to air transportation taxes, the receiver of the payment for air transportation services has to collect and pay and report the tax on Form 720.  The tax rate varies based on whether persons or property are being transported.  For fuel taxes, if the taxpayer is reporting gallons of taxable fuel that will probably be sold again and taxed again, the taxpayer should file a first taxpayer’s report, and give a copy of the report to the buyer.  The first taxpayer’s report also needs to be filed with Form 720.

            The retail tax applies to truck, trailer, and semi trailer chassis and bodies, and tractors.  The tax rate is at 12% of the sales price on the first retail sale of the property.  The ship passenger tax is levied on commercial ship operators.  They are taxed at $3 per passenger on the commercial passenger ship.  Manufacturers taxes are for underground mined coal, surface mined coal, taxable tires, gas guzzler tax, and vaccine taxes.  The last type of tax reported in Part I of Form 720 is Foreign Insurance Taxes.  This tax is for policies issued by foreign insurers. 

             Part II of Form 720 reports excise taxes for sport fishing equipment, fishing rods and fishing poles, electric outboard motors, fishing tackle boxes; bows, quivers, broad heads, and points; arrow shafts, inland waterways fuel use tax, alcohol sold as but not used as fuel, biodiesel sold as but not used as fuel, and floor stocks tax.  The floor stocks tax is for ozone-depleting chemicals.

             The normal process for excise taxes is for the taxpayer to make semimonthly deposits, meaning making two deposits per month.  In some cases, deposits would not be required, and the full amount would be paid with the return.

             Are you looking for a CPA, Accounting Firm, or Financial Advisor to assist you with your  tax reporting, bookkeeping, or general accounting needs?  Try the CPA Search feature on this website to find a qualified professional in your area to assist you with all your accounting and tax needs.


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