Instructions For Form 720 - Quarterly Federal Excise Tax Return

Line 4. Nontaxable Use of Undyed Kerosene

Line 7a. Sales By Registered Ultimate

(Other Than Kerosene Used in Aviation)

Vendors of Undyed Diesel Fuel

Claimant. For line 7a, the registered ultimate vendor of the

Ultimate purchasers use line 4c to make claims for

diesel fuel is the only person eligible to make this claim and

kerosene used on a farm for farming purposes.

has obtained the required certificate from the buyer and has

CAUTION

no reason to believe any information in the certificate is

false. See Model Certificate P in Pub. 510. Only one claim

Allowable uses. For line 4a, the kerosene must have been

may be filed with respect to any gallon of diesel fuel.

used during the period of claim for type of use 2, 6, 7, 8, or

12. For exported undyed kerosene, see Exported taxable

Allowable sales. The fuel must have been sold during the

fuel on page 10. Type of use 2 does not include any

period of claim for the exclusive use by a state or local

personal use or use in a motorboat. Type of use 8 includes

government (including essential government use by an

use as heating oil and use in a motorboat.

Indian tribal government).

Exception. Claims for kerosene used in aviation on a

farm for farming purposes must be claimed by the ultimate

Claim requirements. The following requirements must be

vendor.

met.

1. The claim must be for diesel fuel sold during a period

Line 5. Kerosene Used in Commercial

that is at least 1 week.

Aviation (Other Than Foreign Trade)

2. The amount of the claim must be at least $200. To

meet this minimum requirement, amounts from line 7, 8, and

Claimant. The ultimate purchaser of the kerosene used in

9 may be combined.

commercial aviation (other than foreign trade) is eligible to

3. Claims must be filed by the last day of the first quarter

make this claim.

following the earliest quarter of the claimant’s income tax

Allowable uses. For lines 5a and 5b, claimant certifies that

year included in the claim. For example, a calendar year

the right to make the claim has not been waived. If the

income taxpayer’s claim for the first quarter is due June 30 if

claimant buys kerosene partly for use in commercial aviation

filed on Form 8849. However, Form 720 must be filed by

and partly for use in noncommercial aviation, see the rules

April 30.

in Notice 2005-80, section 3(e)(3). Only one claim may be

filed with respect to any gallon of kerosene used in

If requirements 1-3 above are not met, see Annual

commercial aviation.

Claims on page 14.

Line 6. Nontaxable Use of Alternative Fuel

Registration number. Enter your UV registration number in

Claimant. The ultimate purchaser of the taxed alternative

the space provided.

fuel is the only person eligible to make this claim.

Information to be submitted. For claims on line 7a, attach

Allowable uses. The alternative fuel must have been used

a separate sheet with the name and TIN of each

during the period of claim for type of use 1, 2, 3, 4, 5, 6, 7,

governmental unit to whom the diesel fuel was sold and the

13, 14, or 15.

number of gallons sold to each.

Type of use 5. Write “Bus” in the space to the left of the

Type of use column. Enter the correct claim rate in the Rate

Line 7b. Sales by Registered Ultimate

column. The claim rates for type of use 5 are listed below.

Vendors of Undyed Diesel Fuel for Use in

Certain Intercity and Local Buses

Line number

Claim rate

Claimant. For line 7b, the registered ultimate vendor of the

$.109

diesel fuel is eligible to make a claim only if the buyer

.110

waives his or her right to make the claim by providing the

registered ultimate vendor with an unexpired waiver. See

.109*

Model Waiver N in Pub. 510. Only one claim may be filed

.110

with respect to any gallon of diesel fuel.

.17

Claim requirements. The following requirements must be

met.

.17

1. The claim must be for diesel fuel sold during a period

.169

that is at least 1 week.

* This is the claim rate per gasoline gallon equivalent (126.67 cubic feet of

2. The amount of the claim must be at least $200. To

CNG).

meet this minimum requirement, amounts from lines 7, 8,

and 9 may be combined.

3. Claims must be filed by the last day of the first quarter

Information for Claims on Lines 7–11

following the earliest quarter of the claimant’s income tax

Registration number. To make an ultimate vendor claim

year included in the claim. For example, a calendar year

on lines 7 – 11, you are required to be registered. Enter your

income taxpayer’s claim for the first quarter is due June 30 if

registration number, including the prefix, on the applicable

filed on Form 8849. However, Form 720 must be filed by

line for your claim. If you are not registered, you cannot

April 30.

make a claim at this time. Use Form 637, Application for

Registration (For Certain Excise Tax Activities), to apply for

If requirements 1-3 above are not met, see Annual

one.

Claims on page 14.

Required certificates or waivers. The required certificates

Registration number. Enter your UB registration number in

or waivers for lines 7 – 11 are listed in the line instructions

the space provided.

and are available in Pub. 510.

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2006 Page 11

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