Blog Details

Part I

• Environmental Tax: Taxes imposed on petroleum products, chemical substances, and ozone-depleting chemicals (ODCs) to address environmental cleanup and chemical regulation.
  
  

• Communications and Air Transportation Taxes: Excise taxes applied to services such as local telephone and teletypewriter exchange services, and to the transportation of persons or property by air (including international air travel facilities).
  
  

• Fuel Taxes: A broad category covering taxes on gasoline, kerosene, diesel, liquefied petroleum gas, compressed natural gas, and other fuels or fuel-uses, based on removal, sale or usage.
  
  

• Retail Tax: Tax on sales of specific tangible goods in the retail channel. For example, certain truck, trailer, semitrailer chassis and bodies, or tractors.
  
  

• Ship Passenger Tax: An excise tax on transportation of passengers by water (often cruise or similar maritime transport).
  
  

• Foreign Insurance Tax: Taxes on premiums or contracts issued by foreign insurers for life, health, sickness or accident insurance, and on reinsurance.
  
  

• Manufacturers Taxes: Taxes imposed on manufacturers, producers or importers of certain goods. For example coal production, taxable tires, “gas guzzler” vehicles, or vaccines.
  
  

• Other Excise Tax: A catch-all category for taxes not included under the other headings such as obligations not in registered form.

Part II

This part mainly covers the Patient-Centered Outcomes Research (PCORI) Fee, which applies to self-insured health plans and specified insurance policies, calculated per covered life each year. Other excise taxes under this section include items such as sport-fishing equipment, indoor tanning services, biodiesel sold but not used as fuel, and corporate stock repurchases, among others—reflecting a mix of health-related and specialty taxes, and more.

Each of these taxes is tied to a specific IRS number, which helps businesses correctly report the taxes due based on the goods or services they provide. When filing Form 720, it's important to refer to the correct IRS number for each excise tax category applicable to your business.

The Instructions for Form 720 (Rev. June 2025) provide detailed guidance on how to report each tax category, including specific IRS numbers, tax rates, and applicable credits or refunds. Key highlights include:

• Tax Reporting by IRS Number: Each excise tax is assigned a unique IRS number, which corresponds to a specific line on Form 720. For instance, the environmental tax on imported petroleum products is reported under IRS No. 16.

• Tax Rates and Calculation Methods: The instructions specify the rates for each tax and the method for calculating the tax liability. For example, fuel taxes are calculated based on the number of gallons sold or used.

• Credits and Refunds: Certain taxes allow for credits or refunds. The instructions outline the procedures for claiming these, such as completing Schedule C for fuel tax credits.

• Filing Methods: The IRS provides options for filing Form 720, including electronic filing through approved providers and traditional paper filing.

Form 720 is referred to as the "Quarterly Federal Excise Tax Return" because it is filed four times a year, corresponding to the following quarters:

• Q1: January 1 – March 31 (Due April 30)

• Q2: April 1 – June 30 (Due July 31)

• Q3: July 1 – September 30 (Due October 31)

• Q4: October 1 – December 31 (Due January 31)

These deadlines ensure timely reporting and payment of excise taxes, helping to fund various federal programs and initiatives.

There are two primary methods for filing Form 720: manual (paper) filing and electronic filing.

Manual (Paper) Filing

• Download the Form: Obtain the latest version of Form 720 from the IRS Website.

• Complete the Form: Fill out the form accurately, ensuring all applicable tax categories are reported.

• Prepare Payment: Include a check or money order for any taxes owed, payable to the "United States Treasury."

• Mail the Form: Send the completed form and payment to the appropriate IRS mailing address listed in the instructions.

Electronic Filing

• Choose an Approved E-File Provider: Select an IRS-authorized e-file provider for excise taxes.

• Submit the Form: Complete and submit Form 720 electronically through the provider's platform.

• Make Payment: Pay any taxes owed electronically using the Electronic Federal Tax Payment System (EFTPS) or IRS Direct Pay.

Electronic filing is recommended for its speed, accuracy, and the immediate confirmation of receipt.

Conclusion

IRS Form 720 plays a crucial role in ensuring that businesses comply with federal excise tax requirements. By understanding the various tax categories, adhering to filing deadlines, and choosing the appropriate filing method, businesses can maintain compliance and contribute to the funding of essential federal programs.

File your IRS Form 720 online with quickfile720 today!