Some of the money from excise taxes goes into the government’s general fund, while other excise tax money such as funds collected via the excise tax on gasoline go into special funds dedicated to specific purposes. The federal excise tax on gasoline goes to fund roads.
Federal Excise Tax Form 720:
IRS excise tax form 720 comprises of several sections and understanding them makes your tax filing process smooth. Here’s a brief overview of the various sections involved in Part I in IRS Form 720.
Dealers and sellers of crude oil, imported petroleum products, and ODC’s are subjected to file this excise tax return. Form 6627 is attached along with Form 720.
If you’re using local telephone services and teletypewriter exchange service, you’re liable to file this Quarterly Federal Communication Tax.
Air Transportation Tax:
Air transportation Tax needs to be filed by the Airline Company, providing a consolidated report about the passengers and the property handled through flights. Also, the usage of transportation facilities should be reported in this excise tax form.
This involves the use and sell of diesel, kerosene, gasoline and LNG, included some Alternative fuels (LPG, CNG).
All manufacturers and sellers of highway vehicles such as bus, heavy trucks and truck tractors should file under this category.
Ship Passenger Tax:
The IRS imposes tax on certain ship voyages. This tax is applied annually on the person organizing the voyage, on the operator of commercial ships.
Foreign Insurance Tax:
Foreign issuers issuing policies such as indemnity bonds and casualty insurance are implied.
This IRS excise tax applies to the seller and manufacturers of coal. This tax also involves one-time gas guzzler tax imposed on imported vehicles and vehicles driven by gasoline or diesel fuel with a minimum gross weight of 6,000 lbs.
Part 2 of Excise tax form 720 included;
Patient‐Centered Outcomes Research Fee
The Affordable Care Act imposes a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered Outcomes Research Institute. The fee, required to be reported only once a year on the second quarter Form 720 and paid by its due date, July 31, is based on the average number of lives covered under the policy or plan.
Indoor tanning services
Indoor tanning services providers should collect the 10 percent tax at the time the purchaser pays for the indoor tanning services. The provider must pay the excise tax to the government, quarterly, along with IRS Form 720, Quarterly Federal Excise Tax Return.
Floor Stocks Tax
To figure the environmental tax on petroleum, ODCs – Ozone-depleting chemicals, imported products that used ODCs as materials in the manufacture or production of the product, and the floor stocks tax on ODCs. Attach the additional sheets with Form 6627 to Form 720, Quarterly Federal Excise Tax Return.
The leaking underground storage tank (LUST) tax on inland waterways fuel use, tax must be paid on any liquid fuel used on inland waterways that isn’t subject to LUST tax under section 4041(d) or 4081.
Some other excise taxes paid by manufacturer, producer, or importers are on Sport Fishing Equipment’s; Fishing rods and fishing poles, Electric outboard motors, Fishing tackle boxes, Arrow shafts.
Electronic Filing for Federal Excise Taxes
The foremost is IRS could receive your returns and process it faster than any other way of filing. Choosing online filing or electronic filing eliminated all possible human errors that could happen in a tax return. Let see some of the larger benefits of e-filing Form 720 returns.
- Faster Processing – e-filed returns are processed much faster than paper filed returns.
- Convenience – available online 24 hours a day, 7 days a week.
- Ease of use – user friendly, with step-by-step instructions and clear screens indicators to walk you through the filing process. E-file is a cake-walk
- Greater Accuracy in Processing – accurate tax calculation based on the entries you make and will not sent an incomplete return to IRS.
- Pay Right – while you e-file you pay the tax that you owe not extra or less.
- Electronic Payment – convenience of direct withdrawal of tax due and EFTPS option to make payments.
- Less Hassle, No Mails – no mailing of paper returns and waiting for mails for weeks, everything is managed electronically and digitally.
- Security – safer than mailing your tax return and sent right to the IRS server no more data loss.
- Avoid paying extra – when you e-file you can make sure your return reaches them well in the time frame no late penalties or late filing charges.
- No more typos – while you e-file you won’t get typos such us 1 for I or 0 for o etc.
Electronic filing is by and large the best way of reporting Quarterly Federal Excise Tax Form 720 returns with the IRS and get the best available resources. The most trusted and top rated website since 2007.