Instructions For Form 720 - Quarterly Federal Excise Tax Return

Use of International Air Travel Facilities

Requirements. All of the following requirements must

be met to be eligible for the reduced rate: (a) the

(IRS No. 27)

diesel-water fuel emulsion must contain at least 14% water,

For amounts paid during 2007, the tax on international

(b) the emulsion additive must be registered by a United

flights is:

States manufacturer with the EPA under section 211 of the

•

$15.10 per person for flights that begin or end in the

Clean Air Act, and (c) the taxpayer must be registered by

United States, or

the IRS. If these requirements are not met, you must report

•

$7.50 per person for domestic segments that begin or end

the sale, removal, or use of a diesel-water fuel emulsion as

in Alaska or Hawaii (applies only to departures).

diesel fuel.

Communication and Air Transportation

Dyed diesel fuel used in trains (IRS No. 71). If you are

Taxes—Uncollected Tax Report

liable for the tax on dyed diesel fuel used in trains, report the

number of gallons subject to tax on the line for IRS No. 71.

A separate report is required to be filed by collecting agents

IRS Nos. 105, 107, 119, and 111. Tax is imposed at $.001

of communications services (local and teletypewriter

per gallon on removals, entries, and sales of gasoline, diesel

service) and air transportation taxes if the person from

fuel, and kerosene described as exempt transactions.

whom the facilities or services tax (the tax) is required to be

•

IRS No. 105, Dyed diesel fuel, LUST tax.

collected (the taxpayer) refuses to pay the tax, or it is

•

IRS No. 107, Dyed kerosene, LUST tax.

impossible for the collecting agent to collect the tax. The

•

IRS No. 119, LUST tax, other exempt removals. Report

report must contain the name and address of the taxpayer,

gasoline blendstocks, kerosene used for a feedstock

the type of facility provided or service rendered, the amount

purpose, and diesel fuel or kerosene sold or used in Alaska.

paid for the facility or service (the amount on which the tax is

•

IRS No. 111, Kerosene for use in aviation, LUST tax on

based), and the date paid.

nontaxable uses, including foreign trade. Report gallons of

Regular method taxpayers. For regular method

kerosene removed directly from a terminal into the fuel tank

taxpayers, the report must be filed by the due date of the

of an aircraft for nontaxable uses or for use in foreign trade.

Form 720 on which the tax would have been reported.

Multiply the total number of gallons subject to tax for each

Alternative method taxpayers. For alternative method

fuel by $.001 and make the entry in the tax column.

taxpayers, the report must be filed by the due date of the

Form 720 that includes an adjustment to the separate

Kerosene (IRS No. 35). If you are liable for the kerosene

account for the uncollected tax. See Alternative method on

tax on removal at the terminal rack, report these gallons on

page 8.

line 35(a). If you are liable for the kerosene tax on events

other than removal at the terminal rack, report these gallons

Where to file. Do not file the uncollected tax report with

of kerosene on line 35(b).

Form 720. Instead, mail the report to:

Multiply the total number of gallons subject to tax on lines

Internal Revenue Service

(a) and (b) by $.244 and make one entry in the tax column.

Excise Tax Program

SE:S:SP:EX MS C9 – 109

Also see Schedule T — Two-Party Exchange Information

5000 Ellin Rd.

Reporting on page 9 if applicable.

Lanham, MD 20706

Kerosene for use in aviation (IRS Nos. 69, 77, and 111).

Generally, kerosene is taxed at $.244 per gallon.

Fuel Taxes

•

For kerosene removed directly from a terminal into the

First taxpayer’s report. If you are reporting gallons of

fuel tank of an aircraft for use in noncommercial aviation, the

taxable fuel that may again be subject to tax, you may need

tax rate is $.219 per gallon. The second tax rate ($.044)

to file a first taxpayer’s report. The report must contain all

applies after December 14, 2007, only if the current tax rate

the information as shown in the Model Certificate B in the

($.219) is not extended. Report these gallons on the line for

Appendix of Publication 510.

IRS No. 69.

•

For kerosene removed directly from a terminal into the

The person who paid the first tax must:

•

fuel tank of an aircraft for use in commercial aviation (other

Give a copy of the first taxpayer’s report to the buyer;

•

than foreign trade), the tax rate is generally $.044 per gallon.

File the first taxpayer’s report with Form 720 for the

Report these gallons on the line for IRS No. 77.

quarter for which the report relates; and

•

For kerosene removed directly from a terminal into the

Write “EXCISE — FIRST TAXPAYER’S REPORT” across

fuel tank of an aircraft for nontaxable uses or for use in

the top of a separate copy of the report, and by the due date

foreign trade, the tax rate is generally $.001 per gallon.

of Form 720, send the copy to:

Report these gallons on the line for IRS No. 111.

Department of the Treasury

Other fuels (IRS No. 79). You are liable for the tax on the

Internal Revenue Service Center

fuels listed below when they are delivered into the fuel

Cincinnati, OH 45999-0555

supply tank of a motor vehicle or motorboat (or trains for

Diesel fuel (IRS No. 60). If you are liable for the diesel fuel

B-100). Use the following table to determine the tax for each

tax on removal at the terminal rack, report these gallons on

gallon. Fill in the number of gallons and the appropriate rate

line 60(a). If you are liable for the diesel fuel tax on events

in the Rate column on the line for IRS No. 79. If more than

other than removal at the terminal rack, report these gallons

one rate applies, leave the Rate column blank and attach a

on line 60(b). If you are liable for the diesel fuel tax because

schedule showing the rates and number of gallons taxed at

you have produced diesel fuel by blending biodiesel with

each rate.

taxed diesel fuel outside of the bulk transfer/terminal

system, report these gallons of biodiesel on line 60(c). If you

Fuel

Tax Rate

report gallons on line 60(c), do not report those gallons on

per Gallon

line 60(b).

Qualified —

Multiply the total number of gallons subject to tax on lines

Ethanol produced from coal . . . . . . . . . . . . . . . . . . . .

.1325

(a), (b), and (c) by $.244 and make one entry in the tax

Methanol produced from coal . . . . . . . . . . . . . . . . . . .

.1235

column.

Partially exempt —

Also see Schedule T — Two-Party Exchange Information

Ethanol produced from natural gas . . . . . . . . . . . . . . .

.114

Reporting on page 9 if applicable.

Methanol produced from natural gas . . . . . . . . . . . . . .

.0925

B-100 (100% biodiesel) . . . . . . . . . . . . . . . . . . . . . . . .

.244

Diesel-water fuel emulsion (IRS No. 104). If you are

Other fuels not shown . . . . . . . . . . . . . . . . . . . . . . . .

.184

liable for the reduced rate (see below) of tax on a

diesel-water fuel emulsion removal at the terminal rack or

other taxable event, report these gallons on the line for IRS

Gasoline (IRS No. 62). If you are liable for the gasoline tax

No. 104.

on removal at the terminal rack, report these gallons on line

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2007 Page 4

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