Instructions For Form 720 - Quarterly Federal Excise Tax Return

Department of the Treasury

Instructions for Form 720

Internal Revenue Service

(Rev. January 2006)

Quarterly Federal Excise Tax Return

Section references are to the Internal Revenue Code unless otherwise noted.

calendar quarters of 2006. See Safe Harbor Rule on

General Instructions

page 9.

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The line for the luxury tax (IRS No. 92) will be deleted.

What’s New

The tax expired after December 31, 2002, and the lease

periods ended December 31, 2005.

Changes Effective For The First Calendar

Electronic Payment

Quarter of 2006

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Now, more than ever before, businesses can enjoy the

The tax on arrow shafts (IRS No.106) has increased to

benefits of paying their federal taxes electronically.

$.40 per arrow shaft.

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Whether you rely on a tax professional or handle your

The tax on use of international air travel facilities (IRS

own taxes, the IRS offers you a convenient program to

No. 27) has increased for amounts paid during 2006. For

make it easier. Spend less time on taxes and more time

flights that begin or end in the United States, the rate will

running your business. Use Electronic Federal Tax

be $14.50 per person. For domestic segments that begin

Payment System (EFTPS) to your benefit. For

or end in Alaska or Hawaii (applies only to departures),

information on EFTPS, visit or call EFTPS

the rate will be $7.30 per person.

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Customer Service at 1-800-555-4477. Also see How To

For amounts paid for each domestic segment of

Make Deposits on page 8.

taxable transportation of persons by air (IRS No. 26), the

domestic segment tax has increased to $3.30 per

Purpose of Form

segment for transportation that begins in 2006.

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The one-time filing checkbox has been moved to the

Use Form 720 and attachments to report liability by IRS

gas guzzler tax line (IRS No. 40). See Gas guzzler tax on

No. and pay the excise taxes listed on the form.

page 6.

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When To File

Taxpayers reporting tax on B-100 (100% biodiesel)

should use the other fuels line (IRS No. 79) on Form 720.

You must file a return for each quarter of the calendar

See Other fuels on page 4.

year as follows:

The Energy Policy Act of 2005 and the Safe,

Quarter covered

Due by

Accountable, Flexible, and Efficient Transportation Equity

Act of 2005 (SAFETEA) contain the following provisions

Jan., Feb., Mar.

April 30

effective after December 31, 2005.

Apr., May, June

July 31

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Effective January 1, 2006, the rate of tax for a

July, Aug., Sept.

October 31

diesel-water fuel emulsion will be $.198 per gallon if

certain requirements are met. IRS No. 104 has been

Oct., Nov., Dec.

January 31

added to Form 720

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Renewable diesel will generally be treated the same as

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

biodiesel for credit purposes. New line 13c has been

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

added to Schedule C for renewable diesel mixtures.

next business day.

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Three new IRS Nos. have been added to report

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

taxable tires instead of IRS No. 66.

Service or a designated private delivery service to meet

1. IRS No. 108, Taxable tires other than biasply or

the “timely mailing as timely filing/paying” rule. See

super single tires.

Private Delivery Services on page 2.

2. IRS No. 109, Taxable tires, biasply or super single

Floor stocks tax. Report the floor stocks tax on

tires (other than super single tires designed for steering).

ozone-depleting chemicals (ODCs), IRS No. 20, on the

3. IRS No. 113, Taxable tires, super single tires

return due by July 31 of each year. The tax payment is

designed for steering.

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due by June 30. See Floor Stocks Tax on page 7.

Old line 14 of Schedule C, Gasoline, has been deleted.

Claims for sales of certain taxable fuel to state and local

Where To File

governments and nonprofit educational organizations can

Send Form 720 to the Internal Revenue Service Center,

be made by registered credit card issuers on line new

Cincinnati, OH 45999-0009.

14d if certain conditions are met.

How To File

Changes Effective For The Second Calendar

Quarter of 2006

If you are not reporting a tax that you normally report,

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enter a zero on the appropriate line in Part I or II (Form

The oil spill liability taxes (IRS Nos. 18 and 21) have

720). Also, if you have no tax to report, write “None” on

been reinstated beginning April 1, 2006.

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line 3, Part III; sign and date the return.

Current Form 720 filers who will be liable for the oil

spill liability taxes beginning in April 2006 cannot use the

If you have adjustments to liabilities reported for prior

safe harbor method for deposits in the second and third

quarters, see Form 720X, Amended Quarterly Federal

Cat. No. 64240C

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

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