Instructions For Form 720 - Quarterly Federal Excise Tax Return

Line 14. Alternative Fuel Credit and

used in mobile machinery. See Form 4136 for more

information.

Alternative Fuel Mixture Credit

Line 15. Other Claims

The alternative fuel credit and alternative fuel mixture

For claims under section 6416(b)(2) relating to certain uses

credit, except for the liquefied hydrogen credit (line

and resales of certain articles subject to manufacturers or

14d), expired on December 31, 2009. See What’s

CAUTION

retailers excise taxes, claimant certifies that it sold the article

New on page 1 for more information.

at a tax-excluded price, repaid the amount of tax to the

Claimant. For the alternative fuel credit, the registered

ultimate vendor, or has obtained the written consent of the

alternative fueler who (1) sold an alternative fuel at retail and

ultimate vendor to make the claim; and has the required

delivered it into the fuel supply tank of a motor vehicle or

supporting information.

motorboat, (2) sold an alternative fuel, delivered it in bulk for

Lines 15b and 15c. Exported Dyed Diesel Fuel,

taxable use in a motor vehicle or motorboat, and received

Exported Dyed Kerosene, and Exported

the required statement from the buyer, (3) used an

alternative fuel (not sold at retail or in bulk as previously

Gasoline Blendstocks Taxed at $.001

described) in a motor vehicle or motorboat, or (4) sold an

A claim may be made for dyed diesel fuel or dyed kerosene

alternative fuel for use as a fuel in aviation is the only person

exported in a trade or business during the period of claim.

eligible to make this claim.

Claims for exported gasoline blendstocks taxed at $.001 per

For the alternative fuel mixture credit, the registered

gallon are made on line 15b. See Exported taxable fuel on

alternative fueler that produced and sold or used the mixture

page 11. The claim rate for each fuel is $.001 per gallon.

as a fuel in their trade or business is the only person eligible

Claims for exported gasoline blendstocks taxed at

to make this claim. The credit is based on the gallons of

$.184 per gallon are made on line 1b.

alternative fuel in the mixture.

CAUTION

How to claim the credit. Any alternative fuel credit must

first be taken on Schedule C to reduce your liability for

Line 15d. Diesel-Water Fuel Emulsion

alternative fuel and CNG reported on Form 720. Any

Generally, the claim rate for the nontaxable use of a

alternative fuel mixture credit must first be taken on

diesel-water fuel emulsion taxed at $.198 (credit reference

Schedule C to reduce your taxable fuel liability for gasoline,

number (CRN) 309) is $.197. The fuel must have been used

diesel fuel, and kerosene reported on Form 720. Any excess

during the period of claim for type of use 1, 2, 3, 5, 6, 7, 8, or

alternative fuel credit and alternative fuel mixture credit may

12. For type of use 5, the claim rate is $.124 (CRN 309). For

be taken on Schedule C (Form 720), Form 8849, or Form

type of use 3 (exported), the claim rate is $.198 (CRN 306)

4136.

and is reported on line 15d.

Carbon capture requirement. A credit for liquid fuel

The claim rate for undyed diesel fuel taxed at $.244 (CRN

derived from coal (including peat) through the

310) and used to produce a diesel-water fuel emulsion is

Fischer-Tropsch process can be claimed only if the fuel is

$.046 per gallon of diesel fuel so used (blender claims). The

derived from coal produced at a gasification facility that

claimant must attach a statement certifying that (a) the

separates and sequesters at least 75% of the facility’s total

claimant produced a diesel-water fuel emulsion containing at

carbon dioxide emissions.

least 14% water, (b) the emulsion additive is registered by a

Claim requirements. The alternative fuel credit and

United States manufacturer with the EPA under section 211

alternative fuel mixture credit may not be claimed for

of the Clean Air Act (as in effect on March 31, 2003), (c) the

alternative fuel produced outside the United States for use

claimant used undyed diesel fuel taxed at $.244 to produce

as a fuel outside the United States. The United States

the diesel-water emulsion, and (d) the claimant sold or used

includes any possession of the United States. To claim

the diesel-water fuel emulsion in the blender’s trade or

either credit, you must be registered by the IRS. To claim

business. The blender claimant must be registered by the

the alternative fuel mixture credit, the following requirements

IRS and must enter their registration number on line 15d

must be met if the credit exceeds the amount of taxable fuel

and enter the applicable CRN.

liability reported.

Claim requirements. See Claim requirements for lines

1. The claim must be for an alternative fuel mixture sold

1 – 6 and lines 15b – 15d on page 11.

or used (as described under Claimant above) during a

period that is at least 1 week.

Line 15e. Registered Credit Card Issuers

2. The amount of the claim must be at least $200. To

Allowable sales. The gasoline (CRN 362), aviation

meet the minimum, amounts from lines 12, 13, and 14 may

gasoline (CRN 324), diesel fuel (CRN 360), kerosene (CRN

be combined.

346), or kerosene for use in aviation (CRN 369) must have

been purchased with a credit card issued to the ultimate

If requirements 1 and 2 above are not met, see Annual

purchaser during the period of claim:

Claims on page 15.

•

For gasoline or aviation gasoline, for the exclusive use by

Registration number. You must enter your registration

a state or local government (including essential government

number in the space provided.

use by an Indian tribal government) or for the exclusive use

Form 720X. If you are not registered, you cannot make

of a nonprofit educational organization; or

a claim at this time. Use Form 637 to apply for registration.

•

For diesel fuel, kerosene, or kerosene for use in aviation,

After you are registered by the IRS, file Form 720X to claim

for the exclusive use by a state or local government

the credit for this period.

(including essential government use by an Indian tribal

government).

Annual Claims

Claimant. The registered credit card issuer is the only

If a claim on lines 1 – 9, 12 – 14, or 15b – 15e was not made

person eligible to make this claim if the credit card issuer:

for any gallons, an annual claim may be made. Generally,

an annual claim is made on Form 4136 for the income tax

1. Is registered by the IRS;

year during which the fuel was used by the ultimate

2. Has not collected the amount of tax from the ultimate

purchaser, sold by the registered ultimate vendor, used to

purchaser or has obtained the written consent of the

produce an alcohol fuel mixture and biodiesel mixture, or

ultimate purchaser to make the claim;

-15-

Instructions for Form 720 (Rev. 7-2010)

Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2010 Page 15

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