Instructions For Form 720 - Quarterly Federal Excise Tax Return

bows having a peak draw weight of 30 pounds or more. The

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

tax is also imposed on the sale of any part or accessory

at an authorized financial institution. See How To Make

suitable for inclusion in or attachment to a taxable bow and

Deposits below.

any quiver, broadhead, or point suitable for use with arrows

Part III

described below. Add the tax on each sale during the

quarter and enter the total on the line for IRS No. 44.

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

Arrow shafts (IRS No. 106). The tax on arrow shafts is

Schedule C, line 16. See the instructions for Schedule

$.42 per arrow shaft. The tax is paid by the manufacturer,

C – Claims on page 9.

producer, or importer of any arrow shaft (whether sold

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

separately or incorporated as part of a finished or unfinished

previous return that you applied to this return and the

product) of a type used in the manufacture of any arrow

amount from Form 720X, line 5b.

which after its assembly meets either of the following

conditions.

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

•

It measures 18 inches or more in overall length.

line 11 you want to have applied to that return.

•

It measures less than 18 inches in overall length but is

suitable for use with a taxable bow, described earlier.

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

overpayment on line 11 and line 7 will first be applied

Add the tax on each sale during the quarter and enter the

to the unpaid amounts.

CAUTION

total on the line for IRS No. 106.

Inland waterways fuel use tax (IRS No. 64). If you are

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

liable for the inland waterways fuel use tax, report the

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

number of gallons subject to tax on the line for

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

IRS No. 64.

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

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

The inland waterways fuel use tax applies at the rate

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

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

taxes imposed on the sale or use of the fuel.

CAUTION

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

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

Alcohol sold as but not used as fuel (IRS No. 51). An

penalty.

excise tax is imposed if the alcohol fuel mixture credit or

CAUTION

alcohol credit was claimed and any person later: (a) uses a

mixture or straight alcohol for a purpose other than fuel, (b)

Payment of Taxes

separates the alcohol from the mixture, or (c) mixes the

Generally, semimonthly deposits of excise taxes are

straight alcohol.

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

Use the following table to determine the tax for each

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

gallon of alcohol. Fill in the number of gallons and the

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

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

However, no deposit is required for the situations listed

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

below. The taxes are payable with the return.

blank and attach a schedule showing the rates and number

•

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

of gallons taxed at each rate.

not exceed $2,500 for the quarter.

•

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

THEN the tax rate

IF the alcohol is...

AND...

per gallon is...

Gas guzzler tax on page 6.

•

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

•

at least 190 proof

is ethanol

$ .51

for the floor stocks tax that generally requires a single

•

is methanol

.60

•

deposit. See Floor Stocks Tax above.

benefited from the

.61

small ethanol

How To Make Deposits

producer credit

•

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

at least 150 proof but

is ethanol

$ .3778

•

mail your deposits directly to the IRS. Records of your

less than 190 proof

is methanol

.45

•

benefited from the

.4778

deposits will be sent to the IRS for crediting to your

small ethanol

accounts.

producer credit

Electronic deposit requirement. You must make

electronic deposits of all depository taxes (such as deposits

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

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

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

using the Electronic Federal Tax Payment System (EFTPS)

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

in 2007 if:

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

•

The total deposits of such taxes in 2005 exceeded

biodiesel or renewable diesel for a purpose other than as

$200,000 or

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

•

You were required to use EFTPS in 2006.

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

diesel.

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

Federal Tax Deposit Coupon, instead, you may be subject

The tax is $.50 per gallon of biodiesel, $1.00 per gallon of

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

agri-biodiesel, and $1.00 per gallon of renewable diesel. An

may participate voluntarily. To get more information or to

additional $.10 is added if the agri-biodiesel benefited from

enroll in EFTPS, visit the EFTPS website at

the small agri-biodiesel producer credit. Fill in the number of

or call 1-800-555-4477. Also see Publication 966, The

gallons and the appropriate rate in the Rate column on the

Secure Way to Pay Your Federal Taxes.

line for IRS No. 117. If more than one rate applies, leave the

Rate column blank and attach a schedule showing the rates

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

and number of gallons taxed at each rate.

you must initiate the transaction at least 1 business day

before the date the deposit is due.

Floor Stocks Tax

Federal tax deposit coupons. If you are not making

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

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

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

an authorized financial institution. See the instructions in the

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

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

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

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

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2007 Page 7

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