Instructions For Form 720 - Quarterly Federal Excise Tax Return

Department of the Treasury

Instructions for Form 720

Internal Revenue Service

(Rev. October 2008)

Quarterly Federal Excise Tax Return

Section references are to the Internal Revenue Code unless

more information on applying for an EIN, see Employer

Identification Number (EIN) on page 3.

otherwise noted.

Generally, QSubs and eligible single-owner disregarded

What’s New

entities will continue to be treated as disregarded entities for

other federal tax purposes (other than employment taxes).

Thus, taxpayers filing Form 4136, Credit for Federal Tax

Liquefied gas derived from biomass. After October 3,

Paid on Fuels, with Form 1040, Individual Income Tax

2008, liquefied gas derived from biomass is taxable at $.184

Return, can use the owner’s TIN. For more information on

per gallon. You are liable for tax on liquefied gas derived

these new regulations, see Treasury Decision (T.D.) 9356.

from biomass that is delivered into the fuel supply tank of a

You can find T.D. 9356 on page 675 of Internal Revenue

motor vehicle or motorboat and on certain bulk sales. Report

Bulletin 2007-39 at

this tax under IRS No. 79.

Electronic filing. You can now electronically file Form 720

A claim for nontaxable use of liquefied gas derived from

through any electronic return originator (ERO), transmitter,

biomass can be made on line 6h (credit reference number

and/or intermediate service provider (ISP) participating in

435) at $.183 per gallon.

the IRS e-file program for excise taxes. For more

Retail tax (IRS No. 33). Exclude the cost of certain idling

information on e-file, visit the IRS website at

reduction devices and insulation sold or installed after

October 3, 2008, from the sales price of the taxable vehicle.

See Retail Tax on page 5 for more information.

Electronic payment. Now, more than ever before,

businesses can enjoy the benefits of paying their federal

Arrow shafts (IRS No. 106). Certain wooden arrows first

taxes electronically. Whether you rely on a tax professional

sold after October 3, 2008, are not taxable. See Arrow

or handle your own taxes, the IRS offers you a convenient

shafts (IRS No. 106) on page 7 for more information.

program to make it easier. Spend less time on taxes and

Alternative fuel credit and alternative fuel mixture credit.

more time running your business. Use the Electronic

You may be eligible to claim the alternative fuel credit and

Federal Tax Payment System (EFTPS) to your benefit. For

alternative fuel mixture credit for compressed gas derived

information on EFTPS, visit or call the

from biomass and liquefied gas derived from biomass sold

EFTPS Customer Service at 1-800-555-4477. If you are

or used after October 3, 2008. For more information, see

filing Form 720 electronically, you can choose to pay using

Line 14. Alternative Fuel Credit and Alternative Fuel Mixture

electronic funds withdrawal (direct debit). For more

Credit on page 13.

information, see How To Make Deposits on page 7.

Alternative fuel used in aviation. You can claim the

alternative fuel credit for alternative fuel sold after October 3,

2008, for use as a fuel in aviation.

General Instructions

Credits limited to fuel produced in the United States.

The alcohol fuel mixture credit, biodiesel mixture credit,

Purpose of Form

alternative fuel credit, and alternative fuel mixture credit may

not be claimed with respect to alcohol, biodiesel, and

Use Form 720 and attachments to report liability by IRS No.

alternative fuel that is produced outside the United States for

and pay the excise taxes listed on the form.

use as a fuel outside the United States. The United States

Who Must File

includes any possession of the United States.

You must file Form 720 if you were previously liable for any

Reminders

of the federal excise taxes listed in Parts I and II of Form

720 and you have not filed a final return. See How To File

Alternative fuel credit and mixture credits. The

for more information.

alternative fuel credit must first be taken on Schedule C

(Form 720) to reduce liability for alternative fuel and

compressed natural gas (CNG) reported on Form 720. The

When To File

alcohol fuel mixture credit, biodiesel mixture credit,

You must file a return for each quarter of the calendar year

renewable diesel mixture credit, and alternative fuel mixture

as follows:

credit must first be taken on Schedule C (Form 720) to

reduce taxable fuel liability for gasoline, diesel fuel, and

Quarter covered

Due by

kerosene reported on Form 720. For more information, see

Jan., Feb., Mar.

April 30

the instructions for lines 12, 13, and 14.

Disregarded entities and qualified subchapter S

Apr., May, June

July 31

subsidiaries. Qualified subchapter S subsidiaries (QSubs)

July, Aug., Sept.

October 31

and eligible single-owner disregarded entities are treated as

Oct., Nov., Dec.

January 31

separate entities for excise tax and reporting purposes.

QSubs and eligible single-owner disregarded entities must

pay and report excise taxes (other than IRS Nos. 31, 51,

If any due date for filing a return falls on a Saturday,

and 117), register for excise tax activities, and claim any

Sunday, or legal holiday, you may file the return on the next

refunds, credits, and payments under the entity’s employer

business day.

identification number (EIN). These actions cannot take place

under the owner’s taxpayer identification number (TIN).

Send your return to the IRS using the U.S. Postal Service

Some QSubs and disregarded entities may already have an

or a designated private delivery service to meet the “timely

EIN. However, if you are unsure, please call the IRS

mailing as timely filing/paying” rule. See Private Delivery

Business and Specialty Tax line at 1-800-829-4933. For

Services on page 2.

Cat. No. 64240C

Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2008

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