Blog Details

Federal excise taxes are taxes imposed by the IRS on specific goods, services, and activities. Form 720 is the primary form used to report and pay these excise taxes. It covers a wide range of activities such as fuel sales, transportation, health-related products, and more. If your business is involved in any of these activities, you may need to file Form 720.

Form 720 is required for businesses in various industries. Below is a list of the industries and activities that require filing of Form 720:

Excise Tax Categories Covered on Form 720

Businesses involved in any of the following activities must file Form 720 to report excise taxes:

• Fuel and Gasoline: Businesses selling or using gasoline, diesel, kerosene, LPG, compressed natural gas, and hydrogen.

• LUST Tax: Businesses that own or operate underground storage tanks containing petroleum products.

• Environmental Taxes: Ozone-depleting chemicals, imported chemicals, and petroleum-related environmental taxes.

• Communications & Air Transportation Taxes: Local telephone services, air travel transportation of goods or passengers.

• Retail Taxes: Heavy trucks, trailers, semitrailers, chassis bodies, tractors.

• Foreign Insurance Premiums: Payments for foreign life insurance premiums.

• Manufacturer & Other Specific Taxes: Taxes on coal, tires, taxable vehicles, sport fishing equipment, electric outboard motors, and vaccines.

• Indoor Tanning Services: Businesses offering indoor tanning services.

• PCORI Fee: Employers offering health insurance plans or self-insured plans.

• Biodiesel & Fuel-Related Items: Biodiesel sold but not used as fuel.

• Sales of Designated Drugs: Taxes related to specific drug sales.

• Repurchase of Corporate Stock Tax: Tax on corporate stock repurchases.

Conclusion

If your business is involved in any of the industries or activities listed above, you are required to file Form 720. Timely filing ensures compliance with IRS excise tax regulations and helps you avoid penalties, interest, or missed tax credits. It is important to review your business activities each quarter to determine if you need to file Form 720.

If you're unsure whether your business falls into any of these excise tax categories, consult a tax professional or review the latest IRS Form 720 instructions.