Aug 18 ,2025
Diesel, Gasoline, Kerosene: What Fuel Types Trigger IRS Form 720?
Diesel, Gasoline, Kerosene: What Fuel Types Trigger IRS Form 720?
Understanding IRS Form 720 and Fuel Excise Taxes
IRS Form 720 is better recognized by its popular name, the Quarterly Federal Excise Tax Return. It is a return to be filed by companies engaged in the selling or using of specific taxable fuels. The Internal Revenue Service (IRS) imposes excise taxes on specific petroleum products to fund infrastructure, environmental regulations, and transportation funding. Because these fuels are directly subject to excise taxes, they are highly relevant for fuel distributors, trucking companies, and energy businesses required to file Form 720.
Diesel: A Major Source of Federal Excise Tax Revenue
Diesel fuel is a predominant fuel within the transportation and logistics systems that powers trucks, buses, and heavy-duty vehicles in the United States. The IRS requires companies dealing in diesel to report and pay excise tax through Form 720 diesel fuel tax reporting. It is important to note the distinction between uses of tax-exempt versus taxable fuel, whether it be ultra-low sulfur diesel (ULSD) or dyed diesel used in an off-road application.
Gasoline: Heaviest Tax Fuel Consumption
Gasoline is the most consumed fuel in America and falls under one of the highest burdens of excise taxes. Therefore, distributors or importers handling the gasoline have to report their operation under Form 720 gasoline excise tax. Highways and maintenance of these roads will be funded under gasoline excise taxes; compliance with this ensures that businesses can avoid costly penalties while in compliance with important federal transportation initiatives. Accurate tax filing requires understanding distinctions between pure gasoline, ethanol blends, and other fuel mixtures.
Kerosene: Heating Oil and Aviation Applicable Taxes
Kerosene is another fuel that triggers an excise tax under IRS Form 720. Such kerosene includes heating oil or jet fuel. The company selling kerosene has to declare its use for home heating, commercial, or aviation purposes. Aviation-quality kerosene, such as jet fuel excise tax reporting, is highly controlled, while some kerosene sold for non-taxable purposes may be entitled to refunds or exemptions. Knowing the difference between what are 'taxable kerosene sales' and exempt transactions includes compliance and tax savings for businesses.
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