Instructions For Form 720 - Quarterly Federal Excise Tax Return

Exported taxable fuel. The claim rates for exported

If you make a claim for alcohol, biodiesel or

renewable diesel, or alternative fuel, a claim for

taxable fuel are listed on lines 1b, 2c, 3e, and 4d, and in the

refund or credit on Form 8849, Form 4136, Form

instructions for lines 15b and 15c. Taxpayers making a claim

CAUTION

6478, or Form 8864 can only be made after the sum of the

for exported taxable fuel must include with their records

alcohol fuel mixture credit, biodiesel or renewable diesel

proof of exportation. Proof of exportation includes:

•

mixture credit, alternative fuel credit, and alternative fuel

A copy of the export bill of lading issued by the delivering

mixture credit is first applied to reduce your taxable fuel

carrier,

•

liability reported on Form 720 for any particular quarter. See

A certificate by the agent or representative of the export

Pub. 510, Notice 2005-4, and Notice 2005-62 for more

carrier showing actual exportation of the fuel,

•

information.

A certificate of lading signed by a customs officer of the

foreign country to which the fuel is exported, or

Type of Use Table

•

A statement of the foreign consignee showing receipt of

the fuel.

The following table lists the nontaxable uses of fuels. You

must enter the number from the table in the Type of use

Line 1. Nontaxable Use of Gasoline

column as required.

Allowable uses. The gasoline must have been used

No.

Type of Use

during the period of claim for type of use 2, 4, 5, 7, or 12.

On a farm for farming purposes

For exported gasoline, see Exported taxable fuel above.

Type of use 2 does not include any personal use or use in a

Off-highway business use (for business use other than in

motorboat.

a highway vehicle registered or required to be registered

for highway use) (other than use in mobile machinery)

Line 2. Nontaxable Use of Aviation Gasoline

Export

Allowable uses. For line 2b, the aviation gasoline must

In a boat engaged in commercial fishing

have been used during the period of claim for type of use 9,

10, or 16. For exported aviation gasoline, see Exported

In certain intercity and local buses

taxable fuel above.

In a qualified local bus

For line 2d, the aviation gasoline must have been used

In a bus transporting students and employees of schools

during the period of claim for type of use 9. This claim is

(school buses)

made in addition to the claim made on line 2b for type of

For diesel fuel and kerosene (other than kerosene used in

use 9.

aviation) used other than as a fuel in the propulsion engine

Line 3. Nontaxable Use of Undyed Diesel

of a train or diesel-powered highway vehicle (but not

off-highway business use)

Fuel

In foreign trade

Ultimate purchasers use line 3d to make claims for

Certain helicopter and fixed-wing aircraft uses

diesel fuel used on a farm for farming purposes.

Exclusive use by a qualified blood collector organization

CAUTION

In a highway vehicle owned by the United States that is

Allowable uses. For line 3a, the diesel fuel must have

not used on a highway

been used during the period of claim for type of use 2, 6, 7,

8, or 12. For exported undyed diesel fuel, see Exported

Exclusive use by a nonprofit educational organization

taxable fuel above. Type of use 2 does not include any

Exclusive use by a state, political subdivision of a state, or

personal use or use in a motorboat. Type of use 8 includes

the District of Columbia

use as heating oil and use in a motorboat.

In an aircraft or vehicle owned by an aircraft museum

Line 4. Nontaxable Use of Undyed Kerosene

In military aircraft

(Other Than Kerosene Used in Aviation)

Claim requirements for lines 1 – 6 and lines 15b – 15d.

Allowable uses. For line 4a, the kerosene must have been

The following requirements must be met.

used during the period of claim for type of use 2, 6, 7, 8, or

1. The amount of the claim must be at least $750

12. For exported undyed kerosene, see Exported taxable

(combining amounts on lines 1, 2, 3, 4, 5, 6, 15b, 15c, and

fuel above. Type of use 2 does not include any personal use

15d). This amount may be met by:

or use in a motorboat. Type of use 8 includes use as heating

oil and use in a motorboat.

a. Making a claim for fuel used during any quarter of a

claimant’s income tax year, or

For lines 4e and 4f, the kerosene must have been used

b. Aggregating amounts from any quarters of the

during the period of claim for type of use 2.

claimant’s income tax year for which no other claim has

Line 5. Kerosene Used in Aviation

been made.

2. Claims must be filed during the first quarter following

Claimant. For lines 5a and 5b, the ultimate purchaser of

the last quarter of the claimant’s income tax year included in

kerosene used in commercial aviation (other than foreign

the claim. For example, a calendar year income taxpayer’s

trade) is eligible to make this claim. For lines 5c, 5d, and 5e,

claim for the first quarter is due June 30 if filed on Form

the ultimate purchaser of kerosene used in noncommercial

8849. However, Form 720 must be filed by April 30.

aviation (except for nonexempt, noncommercial aviation and

3. Only one claim may be filed for any quarter.

exclusive use by a state, political subdivision of a state, or

4. The fuel must have been used for a nontaxable use

the District of Columbia) is eligible to make this claim.

during the period of claim.

Claimant certifies that the right to make the claim has not

5. The ultimate purchaser is the only person eligible to

been waived.

make the claim.

Allowable uses. For lines 5a and 5b, the kerosene must

If requirements 1 – 3 above are not met, see Annual

have been used during the period of claim in commercial

Claims on page 15.

aviation. If the claimant buys kerosene partly for use in

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Instructions for Form 720 (Rev. 7-2010)

Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2010 Page 11

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