Instructions For Form 720 - Quarterly Federal Excise Tax Return

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$15.40 per person for flights that begin or end in the

(b) the emulsion additive must be registered by a United

United States, or

States manufacturer with the EPA under section 211 of the

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$7.70 per person for domestic segments that begin or end

Clean Air Act, and (c) the taxpayer must be registered by

in Alaska or Hawaii (applies only to departures).

the IRS. If these requirements are not met, you must report

the sale, removal, or use of a diesel-water fuel emulsion as

Communication and Air Transportation

diesel fuel.

Taxes—Uncollected Tax Report

IRS Nos. 105, 107, 119, and 111. Tax is imposed at $.001

A separate report is required to be filed by collecting agents

per gallon on removals, entries, and sales of gasoline, diesel

of communications services (local and teletypewriter

fuel, and kerosene described as exempt transactions.

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service) and air transportation taxes if the person from

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

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whom the facilities or services tax (the tax) is required to be

IRS No. 107, Dyed kerosene, LUST tax.

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collected (the taxpayer) refuses to pay the tax, or it is

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

impossible for the collecting agent to collect the tax. The

gasoline blendstocks, kerosene used for a feedstock

report must contain the name and address of the taxpayer,

purpose, and diesel fuel or kerosene sold or used in Alaska.

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the type of facility provided or service rendered, the amount

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

paid for the facility or service (the amount on which the tax is

nontaxable uses. Report gallons of kerosene removed

based), and the date paid.

directly from a terminal into the fuel tank of an aircraft for

nontaxable uses.

Regular method taxpayers. For regular method

taxpayers, the report must be filed by the due date of the

Multiply the total number of gallons subject to tax for each

Form 720 on which the tax would have been reported.

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

Alternative method taxpayers. For alternative method

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

taxpayers, the report must be filed by the due date of the

tax on removal at the terminal rack, report these gallons on

Form 720 that includes an adjustment to the separate

line 35(a). If you are liable for the kerosene tax on events

account for the uncollected tax. See Alternative method on

other than removal at the terminal rack, report these gallons

page 8.

of kerosene on line 35(b).

Where to file. Do not file the uncollected tax report with

Multiply the total number of gallons subject to tax on lines

Form 720. Instead, mail the report to:

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

Internal Revenue Service

Also see Schedule T — Two-Party Exchange Information

Excise Tax Program

Reporting on page 9 if applicable.

SE:S:SP:EX MS C9 – 109

Kerosene for use in aviation (IRS Nos. 69, 77, and 111).

5000 Ellin Rd.

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

Lanham, MD 20706

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For kerosene removed directly from a terminal into the

Fuel Taxes

fuel tank of an aircraft for use in noncommercial aviation, the

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

First taxpayer’s report. If you are reporting gallons of

for IRS No. 69.

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taxable fuel that may again be subject to tax, you may need

For kerosene removed directly from a terminal into the

to file a first taxpayer’s report. The report must contain all

fuel tank of an aircraft for use in commercial aviation (other

the information as shown in the Model Certificate B in the

than foreign trade), the tax rate is generally $.044 per gallon.

Appendix of Publication 510.

Report these gallons on the line for IRS No. 77.

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The person who paid the first tax must:

For kerosene removed directly from a terminal into the

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fuel tank of an aircraft for nontaxable uses, the tax rate is

Give a copy of the first taxpayer’s report to the buyer;

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File the first taxpayer’s report with Form 720 for the

generally $.001 per gallon. Report these gallons on the line

quarter for which the report relates; and

for IRS No. 111.

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Write “EXCISE — FIRST TAXPAYER’S REPORT” across

Other fuels (IRS No. 79). You are liable for the tax on the

the top of a separate copy of the report, and by the due date

fuels listed below when they are delivered into the fuel

of Form 720, send the copy to:

supply tank of a motor vehicle or motorboat (or trains for

B-100). Use the following table to determine the tax for each

Department of the Treasury

gallon. Fill in the number of gallons and the appropriate rate

Internal Revenue Service

in the Rate column on the line for IRS No. 79. If more than

Cincinnati, OH 45999-0555

one rate applies, leave the Rate column blank and attach a

Diesel fuel (IRS No. 60). If you are liable for the diesel fuel

schedule showing the rates and number of gallons taxed at

tax on removal at the terminal rack, report these gallons on

each rate.

line 60(a). If you are liable for the diesel fuel tax on events

other than removal at the terminal rack, report these gallons

Fuel

Tax Rate

on line 60(b). If you are liable for the diesel fuel tax because

per Gallon

you have produced diesel fuel by blending biodiesel with

Qualified —

taxed diesel fuel outside of the bulk transfer/terminal

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

.1325

system, report these gallons of biodiesel on line 60(c). If you

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

.1235

report gallons on line 60(c), do not report those gallons on

Partially exempt —

line 60(b).

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

.114

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

.0925

Multiply the total number of gallons subject to tax on lines

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

.244

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

Liquefied gas derived from biomass . . . . . . . . . . . . . . . .

.184

column.

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

.184

Also see Schedule T — Two-Party Exchange Information

Reporting on page 9 if applicable.

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

Diesel-water fuel emulsion (IRS No. 104). If you are

on removal at the terminal rack, report these gallons on line

liable for the reduced rate (see below) of tax on a

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

diesel-water fuel emulsion removal at the terminal rack or

than removal at the terminal rack, report these gallons on

other taxable event, report these gallons on the line for IRS

line 62(b). If you are liable for the gasoline tax because you

No. 104.

have blended alcohol with taxed gasoline outside of the bulk

Requirements. All of the following requirements must

transfer/terminal system, report these gallons of alcohol on

be met to be eligible for the reduced rate: (a) the

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

diesel-water fuel emulsion must contain at least 14% water,

those gallons on line 62(b).

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2008 Page 4

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