Federal Gasoline Tax Rate: Form 720 Filing Guide
What Is the Federal Gasoline and Diesel Tax Rate?
Under IRC Section 4081, federal excise tax applies to certain taxable fuels, including gasoline and diesel fuel. The tax rates consist of a base fuel tax rate plus the Leaking Underground Storage Tank (LUST) trust fund financing rate of $0.001 per gallon. The applicable gasoline and diesel fuel tax rates are provided below:
Gasoline and diesel fuel are reported separately on Form 720 because they have different IRS numbers and different base tax rates. These rates generally apply to taxable fuel removed from a terminal rack or imported into the United States outside the bulk transfer system.
Who Is Actually Liable for the Gasoline Tax?
Knowing the federal gasoline tax rate only answers part of the question; the IRS assigns liability to specific parties, and getting this wrong is a common compliance error.
The Position Holder
Whoever holds the inventory position in gasoline stored at a bulk terminal is primarily liable when fuel is removed across the rack.
Terminal Operator Exposure
Terminal operators aren't usually liable, but become jointly responsible if they release fuel to an unregistered position holder or skip verifying registration status.
Refiners at the Rack
Refiners owe tax when gasoline leaves the refinery rack directly, or is sold to a buyer without valid bulk registration.
Importers on Entry
Whoever imports gasoline is liable the moment it crosses the border, unless it moves straight into a registered pipeline or terminal.
Blending Outside the System
Anyone blending alcohol or blendstocks with gasoline outside the registered system owes tax on the added volume.
What Transactions Trigger Federal Gasoline Tax?
Liability tells you who is responsible; it doesn't tell you when the obligation begins. That depends on specific events tied to how gasoline physically moves.
At the Terminal Rack
The most common trigger is gasoline passing through the loading arm at a terminal rack into a truck, rail car, or other non-bulk container.
Refinery Removal
Pulling gasoline directly from a refinery, or selling it there to an unregistered buyer, creates liability before the fuel reaches a terminal.
Crossing the Border
Bringing gasoline into the U.S. outside the bulk system triggers the tax right at entry.
When Blending Happens
Mixing gasoline with alcohol or blendstocks outside an approved terminal produces new taxable fuel on the added gallons.
Bulk transfers between two IRS-registered facilities are tax-deferred; nothing is owed until fuel leaves the registered system for non-bulk transport.
How to Report Federal Gasoline Tax on Form 720
Once a taxable event occurs, that liability moves onto the return, and gasoline tax Form 720 reporting comes down to matching gallons to the right line and schedule.
Note: The last two rows above apply only when there's a nontaxable use or exempt sale to claim; skip Schedule C entirely if no such adjustment applies for the quarter.
Manual Filing Steps for your Gasoline Tax
Total taxable gallons removed at the terminal rack and enter them on Line 62(a).
Total gallons from any other taxable event and enter them on Line 62(b).
Multiply the combined gallons by the $0.184 rate and carry the result into the Tax column.
Complete Schedule A, splitting liability into Period A and Period B for each month.
Complete Schedule T if gasoline moved through a two-party exchange.
Claim eligible credits on Schedule C, then carry the total to Part III, Line 4.
Reconcile deposits against total liability to arrive at a balance due or overpayment.
How to file Federal Gasoline Tax online with QuickFile720?
Step 1 - Login with credentials and enter the business details.
Step 2 - Select the correct IRS number related to Gasoline tax under the right tax category and fill in the required input.
Step 3 - Portal does the auto calculation for your final tax amount.
Step 4 - Review the auto calculated amount and pay it with your preferred payment method.
Your Online filings are done within minutes compared to your manual filings. Visit our Fuel excise tax filing guide page for a detailed step-by-step guidance on the same.
When Is Form 720 Due and What Can Go Wrong?
Form 720 is due quarterly: April 30, July 31, October 31, and January 31. A due date falling on a weekend or holiday shifts to the next business day.
Where quarterly Part I liability exceeds $2,500, tax can't be paid in one lump sum at filing. Semimonthly deposits are required, generally due by the 14th and 29th of each month. Paying the full balance only at filing still draws a failure-to-deposit penalty, even on a timely return.
Two mistakes recur often: filing Part I liability without Schedule A, which delays processing, and skipping a return during a quarter with no taxable activity. Once filed, a business generally must keep filing, even a zero return, until the account is formally closed.
Conclusion
The federal gasoline tax rate is $0.184 per gallon, split between a $0.183 base rate and a $0.001 LUST charge, with diesel taxed separately at $0.244. Liability falls on whoever controls the fuel at the taxable moment, and accurate reporting comes down to matching each gallon to the right line and schedule.
Getting that match wrong is what triggers most of the delays and penalties. QuickFile720 is an IRS-Authorized online portal which calculates the tax amount automatically based on the current tax rates and input provided.
File your Federal Gasoline Tax Online with QuickFile720 today!