Instructions For Form 720 - Quarterly Federal Excise Tax Return

Retail Tax

Manufacturers Taxes

Truck, trailer, and semitrailer chassis and bodies,

Do not include the excise tax on coal in the sales

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

price when determining which tax rate to use.

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

CAUTION

applies to:

•

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

Truck chassis and bodies except truck chassis and

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

bodies suitable for use with a vehicle with a gross vehicle

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

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

•

IRS No. 36 the number of tons of underground mined

Trailer and semitrailer chassis and bodies except

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

trailer and semitrailer chassis and bodies suitable for use

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

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

•

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

Tractors of the kind chiefly used for highway transpor-

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

tation in combination with a trailer or semitrailer

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

regardless of GVW.

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

The sales price of a unit includes the sales price of

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

certain related parts and accessories sold on or in

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

connection with the sale of the unit.

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

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

selling price of less than $12.50 per ton.

the quarter on the line for IRS No. 33.

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

to highway-type tires and is as follows:

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

1. For tires weighing more than 40 pounds but not

taken equal to the amount of tax that has been imposed

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

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

over 40 pounds.

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

2. For tires weighing more than 70 pounds but not

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

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

line 11a.

each pound over 70 pounds.

Ship Passenger Tax

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

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

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

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

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

the quarter on the line for IRS No. 66.

each passenger on a commercial passenger ship that

has berth or stateroom accommodations for at least 17

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

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

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

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

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

hours. The tax also applies to passengers on any

guzzler tax are shown on Form 6197.

commercial ship that transports passengers engaged in

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

gambling aboard the ship beyond the territorial waters of

sale or use of a vaccine manufactured, produced, or

the United States. Enter the number of passengers for

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

•

the quarter on the line for IRS No. 29.

Contains diptheria toxoid, tetanus toxoid, pertussis

bacteria, extracted or partial cell bacteria, specific

Other Excise Tax

pertussis antigens, or polio virus;

•

Is against measles, mumps, rubella, hepatitus B,

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

chicken pox, or rotavirus gastroenteritis;

obligations issued during the quarter, enter the principal

•

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

amount of the obligation multiplied by the number of

•

Is any conjugate vaccine against streptococcus

calendar years (or portion thereof) during the period

pneumoniae.

beginning on the issue date and ending on the maturity

If any taxable vaccine is combined with one or more

date on the line for IRS No. 31.

additional taxable vaccines, then the tax is imposed on

each vaccine included in the combination.

Luxury Tax

Example. MMR contains three taxable vaccines:

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

The luxury tax is scheduled to expire after

December 31, 2002.

is $2.25 (3 x $.75).

CAUTION

Add the tax for each taxable vaccine and enter the

total tax on the line for IRS No. 97.

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

Foreign Insurance Taxes

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

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

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

Enter the amount of premiums paid during the quarter on

tax is paid by the seller of the vehicle.

policies issued by foreign insurers. Multiply the premiums

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

Add the tax on each sale during the quarter and enter

for the three types of insurance on the line for IRS

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

No. 30.

more information.

Treaty-based return positions under section 6114.

Also, see Pub. 510 for information on applying

Foreign insurers and reinsurers who take the position

TIP

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

that a treaty of the United States overrules, or otherwise

modifies, an Internal Revenue law of the United States,

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

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