Instructions For Form 720 - Quarterly Federal Excise Tax Return

diesel-water fuel emulsion must contain at least 14%

these gallons on line 62(b). If you are liable for the

water, (b) the emulsion additive must be registered by a

gasoline tax because you have blended alcohol with

United States manufacturer under section 211 of the

taxed gasoline outside of the bulk transfer/terminal

Clean Air Act with the EPA, and (c) the taxpayer must be

system, report these gallons of alcohol on line 62(c). If

registered by the IRS. If these requirements are not met,

you report gallons on line 62(c), do not report those

you must report the sale, removal, or use of a

gallons on line 62(b).

diesel-water fuel emulsion as diesel fuel.

Multiply the total number of gallons subject to tax on

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

lines (a), (b), and (c) by $.184. Combine the tax for lines

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

(a), (b), and (c), and make one entry in the tax column.

the number of gallons subject to tax on the line for IRS

Also see Schedule T, Two-Party Exchange Information

No. 71.

Reporting on page 9 if applicable.

The tax on dyed diesel fuel used in trains applies

Other fuels (IRS No. 79). Use the following table to

at the rate listed on Form 720. This is in addition

determine the tax for each gallon. Fill in the number of

to all other taxes imposed on the sale or use of

gallons and the appropriate rate in the Rate column on

CAUTION

the fuel.

the line for IRS No. 79. If more than one rate applies,

leave the Rate column blank and attach a schedule

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

showing the rates and number of gallons taxed at each

$.001 per gallon on removals, entries, and sales of

rate.

gasoline, diesel fuel, and kerosene described as exempt

transactions.

•

Fuel

Tax Rate

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

•

per Gallon

IRS No. 107, Dyed kerosene, LUST tax.

•

Liquefied natural gas

.119

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

Qualified —

Report gasoline blendstocks, kerosene used for a

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

.1325

feedstock purpose, and diesel fuel or kerosene used in

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

.1235

Alaska.

Partially exempt —

•

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

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

.114

on nontaxable uses, including foreign trade. Report

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

.0925

gallons of kerosene removed directly from a terminal into

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

.244

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

.184

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

in foreign trade.

Compressed natural gas (IRS No. 101). Tax is

Multiply the total number of gallons subject to tax for

imposed on compressed natural gas (CNG) that is sold

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

for use or used as fuel in a motor vehicle or motorboat.

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

The rate of tax is $.4854 per thousand cubic feet

kerosene tax on removal at the terminal rack, report

(determined at standard temperature and pressure).

these gallons on line 35(a). If you are liable for the

kerosene tax on events other than removal at the

Retail Tax

terminal rack, report these gallons of kerosene on line

35(b).

Truck, trailer, and semitrailer chassis and

bodies, and tractors (IRS No. 33)

Multiply the total number of gallons subject to tax on

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

The tax is 12% (.12) of the sales price on the first retail

column.

sale of each unit. The tax applies to:

•

Truck chassis and bodies except truck chassis and

Also see Schedule T, Two-Party Exchange Information

bodies suitable for use with a vehicle with a gross vehicle

Reporting on page 9 if applicable.

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

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

•

Trailer and semitrailer chassis and bodies except

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

•

trailer and semitrailer chassis and bodies suitable for use

For kerosene removed directly from a terminal into the

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

fuel tank of an aircraft for use in noncommercial aviation,

•

Tractors of the kind chiefly used for highway

the tax rate is $.219 per gallon. Report these gallons on

transportation in combination with a trailer or semitrailer,

the line for IRS No. 69.

•

except tractors that have a gross vehicle weight of

For kerosene removed directly from a terminal into the

19,500 pounds or less and a gross combined weight of

fuel tank of an aircraft for use in commercial aviation

33,000 pounds or less. Generally, gross combined weight

(other than foreign trade), the tax rate is generally $.044

means the weight of a tractor and the weight of its

per gallon. Report these gallons on the line for

trailer(s).

IRS No. 77.

•

The sales price of a unit includes the sales price of

For kerosene removed directly from a terminal into the

certain related parts and accessories sold on or in

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

connection with the sale of the unit.

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

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

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

the quarter on the line for IRS No. 33.

Liquefied petroleum gas (LPG) (IRS No. 61). Only

LPG (such as propane and butane) is reported on the

Gross vehicle weight. The gross vehicle weight means

line for IRS No. 61. LPG is taxed at $.136 per gallon.

the maximum total weight of a loaded vehicle. Generally,

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

this maximum total weight is the gross vehicle weight

tax on removal at the terminal rack, report these gallons

rating provided by the manufacturer or determined by the

on line 62(a). If you are liable for the gasoline tax on

seller of the completed article. The seller’s gross vehicle

events other than removal at the terminal rack, report

weight rating must be determined for excise tax purposes

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2006 Page 4

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