Instructions For Form 720 - Quarterly Federal Excise Tax Return

IRS No. 36 the number of tons of underground mined

Retail Tax

coal sold at $25 or more per ton. Enter on the line for IRS

Truck, trailer, and semitrailer chassis and bodies,

No. 37 the total sales price for all sales of underground

and tractors (IRS No. 33). The tax is 12% (.12) of the

mined coal sold at a selling price of less than $25 per ton.

sales price on the first retail sale of each unit. The tax

Surface mined coal (IRS Nos. 38 and 39). The tax on

applies to:

•

surface mined coal is the lower of $.55 per ton or 4.4%

Truck chassis and bodies except truck chassis and

(.044) of the sales price. Enter on the line for IRS No. 38

bodies suitable for use with a vehicle with a gross vehicle

the number of tons of surface mined coal sold at $12.50

weight (GVW) of 33,000 pounds or less,

•

or more per ton. Enter on the line for IRS No. 39 the total

Trailer and semitrailer chassis and bodies except

sales price for all sales of surface mined coal sold at a

trailer and semitrailer chassis and bodies suitable for use

selling price of less than $12.50 per ton.

with a vehicle with a GVW of 26,000 pounds or less, and

•

Tractors of the kind chiefly used for highway transpor-

Highway-type tires (IRS No. 66). The tax applies only

tation in combination with a trailer or semitrailer

to highway-type tires and is as follows:

regardless of GVW.

1. For tires weighing more than 40 pounds but not

The sales price of a unit includes the sales price of

more than 70 pounds—$.15 a pound for each pound

certain related parts and accessories sold on or in

over 40 pounds.

connection with the sale of the unit.

2. For tires weighing more than 70 pounds but not

Section 4051(d) tire credit. A tax credit may be

more than 90 pounds —$4.50 plus $.30 a pound for

taken equal to the amount of tax that has been imposed

each pound over 70 pounds.

on each tire that is sold on or in connection with the first

3. For tires weighing more than 90 pounds— $10.50

retail sale of a taxable vehicle reported on IRS No. 33.

plus $.50 a pound for each pound over 90 pounds.

Claim the section 4051(d) tire credit on Schedule C, line

Figure the tax for each tire sold and enter the total for

11a.

the quarter on the line for IRS No. 66.

Ship Passenger Tax

Gas guzzler tax (IRS No. 40). Use Form 6197, Gas

Guzzler Tax, to figure the liability for this tax and attach it

Transportation by water (IRS No. 29). A tax is imposed

each quarter to Form 720. The tax rates for the gas

on the operator of commercial ships. The tax is $3 for

guzzler tax are shown on Form 6197.

each passenger on a commercial passenger ship that

has berth or stateroom accommodations for at least 17

Vaccine taxes (IRS No. 97). A tax is imposed on the

passengers if the trip is over 1 or more nights. A voyage

sale or use of a vaccine manufactured, produced, or

extends “over 1 or more nights” if it lasts longer than 24

entered into the United States at $.75 per dose if it:

•

hours. The tax also applies to passengers on any

Contains diptheria toxoid, tetanus toxoid, pertussis

commercial ship that transports passengers engaged in

bacteria, extracted or partial cell bacteria, specific

gambling aboard the ship beyond the territorial waters of

pertussis antigens, or polio virus;

•

the United States. Enter the number of passengers for

Is against measles, mumps, rubella, hepatitus B,

the quarter on the line for IRS No. 29.

chicken pox, or rotavirus gastroenteritis;

•

Is any HIB (haemophilus influenza type B) vaccine; or

Other Excise Tax

•

Is any conjugate vaccine against streptococcus

Obligations not in registered form (IRS No. 31). For

pneumoniae.

obligations issued during the quarter, enter the principal

If any taxable vaccine is combined with one or more

amount of the obligation multiplied by the number of

additional taxable vaccines, then the tax is imposed on

calendar years (or portion thereof) during the period

each vaccine included in the combination.

beginning on the issue date and ending on the maturity

Example. MMR contains three taxable vaccines:

date on the line for IRS No. 31.

measles, mumps, and rubella. The tax per dose on MMR

is $2.25 (3 x $.75).

Luxury Tax

Add the tax for each taxable vaccine and enter the

Passenger vehicles (IRS No. 92). The tax is imposed

total tax on the line for IRS No. 97.

on the first retail sale of a passenger vehicle and is equal

to 3% (.03) of the sales price in excess of $40,000. The

Foreign Insurance Taxes

first retail sale includes the use or lease of a vehicle. The

tax is paid by the seller of the vehicle.

Policies issued by foreign insurers (IRS No. 30).

Enter the amount of premiums paid during the quarter on

Add the tax on each sale during the quarter and enter

policies issued by foreign insurers. Multiply the premiums

the total on the line for IRS No. 92. See Pub. 510 for

paid by the rates listed on Form 720 and enter the total

more information.

for the three types of insurance on the line for IRS

Also, see Pub. 510 for information on applying

No. 30.

TIP

this tax to electric and clean-fuel-burning vehicles.

Treaty-based return positions under section 6114.

Foreign insurers and reinsurers who take the position

Manufacturers Taxes

that a treaty of the United States overrules, or otherwise

modifies, an Internal Revenue law of the United States,

Do not include the excise tax on coal in the sales

must disclose such position. This disclosure must be

price when determining which tax rate to use.

made once a year on a statement which must report the

CAUTION

payments of premiums that are exempt from the excise

Underground mined coal (IRS Nos. 36 and 37). The

tax on policies issued by foreign insurers for the previous

tax on underground mined coal is the lower of $1.10 per

calendar year. This statement is filed with the 1st quarter

ton or 4.4% (.044) of the sales price. Enter on the line for

Form 720, which is due before May 1 of each year.

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2002 Page 5

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