Instructions For Form 720 - Quarterly Federal Excise Tax Return (Page 8 of 18) in pdf

The inland waterways fuel use tax applies at the rate

Line 6. Include on line 6 the amount from line 11 of your

listed on Form 720. This is in addition to all other

previous return that you applied to this return and the

taxes imposed on the sale or use of the fuel.

amount from Form 720X, line 5b.

CAUTION

Note. Include on line 6 of your next return the amount from

LUST tax on inland waterways fuel use (IRS No. 125).

line 11 you want to have applied to that return.

The leaking underground storage tank (LUST) tax must be

paid on any liquid fuel used on inland waterways that is not

If you owe other federal tax, interest, or penalty, the

subject to LUST tax under section 4041(d) or 4081. For

overpayment on line 11 and line 7 will first be applied

example, gallons of Bunker C residual fuel oil must be

to the unpaid amounts.

CAUTION

reported under both IRS Nos. 64 and 125.

Line 10. If line 3 is more than line 9, enter the difference in

Alcohol and cellulosic biofuel sold as but not used as

line 10. You do not have to pay if line 10 is under $1.00.

fuel (IRS No. 51). An excise tax is imposed if the alcohol

fuel mixture credit, alcohol credit, or cellulosic biofuel

You may pay the amount shown on line 10 by EFTPS,

producer credit was claimed and any person later (a) uses

check or money order, or, if filing electronically, electronic

a mixture, straight alcohol, or cellulosic biofuel for a purpose

funds withdrawal (direct debit). If you pay by EFTPS or

other than fuel, (b) separates the alcohol from the mixture,

direct debit, do not file Form 720-V, Payment Voucher.

or (c) mixes the straight alcohol.

If you do not deposit as required and, instead, pay

Use the following table to determine the tax for each

the taxes with Form 720, you may be subject to a

gallon of alcohol. The tax rate for cellulosic biofuel that is not

penalty.

CAUTION

alcohol is $1.01 per gallon ($.46 per gallon if the cellulosic

biofuel is ethanol and $.41 per gallon if the cellulosic biofuel

Payment of Taxes

is alcohol). Fill in the number of gallons and the appropriate

rate in the Rate column on the line for IRS No. 51. If more

Generally, semimonthly deposits of excise taxes are

than one rate applies, leave the Rate column blank and

required. A semimonthly period is the first 15 days of a

attach a schedule showing the rates and number of gallons

month (the first semimonthly period) or the 16th through the

taxed at each rate.

last day of a month (the second semimonthly period).

However, no deposit is required for the situations listed

THEN the tax rate

below. The taxes are payable with the return.

IF the alcohol is...

AND...

per gallon is...

•

The net liability for taxes listed in Part I (Form 720) does

•

at least 190 proof

is ethanol

$ .45

not exceed $2,500 for the quarter.

•

is methanol

.60

The gas guzzler tax is being paid on a one-time filing. See

•

benefited from the

.55

Gas guzzler tax on page 6.

small ethanol

•

The liability is for taxes listed in Part II (Form 720), except

producer credit

for the floor stocks tax that generally requires a single

•

at least 150 proof but

is ethanol

$ .3333

deposit. See Floor Stocks Tax above.

•

less than 190 proof

is methanol

.45

•

benefited from the

.4333

How To Make Deposits

small ethanol

To avoid a penalty, make your deposits timely and do not

producer credit

mail your deposits directly to the IRS. Records of your

deposits will be sent to the IRS for crediting to your

Biodiesel sold as but not used as fuel (IRS No. 117). An

accounts.

excise tax is imposed if the (a) biodiesel or renewable diesel

Electronic deposit requirement. You must make

mixture credit or (b) biodiesel or renewable diesel credit was

electronic deposits of all depository taxes (such as deposits

claimed and any person later (a) uses a mixture or straight

for employment tax, excise tax, and corporate income tax)

biodiesel or renewable diesel for a purpose other than as

using the Electronic Federal Tax Payment System (EFTPS)

fuel, (b) separates the biodiesel or renewable diesel from

in 2009 if:

the mixture, or (c) mixes the straight biodiesel or renewable

•

The total deposits of such taxes in 2007 exceeded

diesel.

$200,000 or

The tax is $1.00 per gallon of biodiesel, agri-biodiesel,

•

You were required to use EFTPS in 2008 or any prior

and renewable diesel. An additional $.10 is added if the

year.

agri-biodiesel benefited from the small agri-biodiesel

If you are required to use EFTPS and use Form 8109,

producer credit. Fill in the number of gallons and the

Federal Tax Deposit Coupon, instead, you may be subject

appropriate rate in the Rate column on the line for IRS No.

to a 10% penalty. If you are not required to use EFTPS, you

117. If more than one rate applies, leave the Rate column

may participate voluntarily. To get more information or to

blank and attach a schedule showing the rates and number

enroll in EFTPS, visit the EFTPS website at

of gallons taxed at each rate.

or call 1-800-555-4477. Also see Pub. 966, The Secure Way

Floor Stocks Tax

to Pay Your Federal Taxes.

Depositing on time. For EFTPS deposits to be on time,

Ozone-depleting chemicals floor stocks tax (IRS No. 20).

you must initiate the transaction at least 1 day before the

Use Form 6627 to figure the liability for this tax. Enter the

date the deposit is due (before 8:00 p.m. Eastern time).

amount from Form 6627, Part IV, line 4, column (d) on the

line for IRS No. 20. Attach Form 6627 to Form 720 that is

Federal tax deposit coupons. If you are not making

due July 31 of each year. Deposit the payment by June 30

deposits by EFTPS, use Form 8109 to make the deposits at

at an authorized financial institution. See How To Make

an authorized financial institution. See the instructions in the

Deposits below.

coupon book for additional information. If you do not have a

coupon book, call 1-800-829-4933.

Part III

You will automatically be enrolled in EFTPS when

TIP

Line 4. Report on Form 720, line 4, the total claims from

you apply for an EIN. You will receive a separate

Schedule C, line 16. See the instructions for Schedule

mailing containing instructions for activating your

C — Claims on page 10.

EFTPS enrollment after you receive your EIN. You will still

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Instructions For Form 720 - Quarterly Federal Excise Tax Return Page 8

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