Instructions For Form 720 - Quarterly Federal Excise Tax Return

The rate of tax is $.4854 per thousand cubic feet

Luxury Tax

(determined at standard temperature and pressure).

The tax on sales of luxury passenger vehicles

Retail Tax

(IRS No. 92) expired after December 31, 2002.

However, the tax continues to apply to payments

CAUTION

Truck, trailer, and semitrailer chassis and

taxpayers receive for long-term leases of luxury

bodies, and tractors (IRS No. 33)

passenger vehicles entered into before January 1, 2003.

Until the end of the lease, taxpayers must continue to pay

Tractors that have a gross vehicle weight of

the tax at the rate in effect when the lease was entered

19,500 pounds or less and a gross combined

into on each lease payment and report the tax each

weight of 33,000 pounds or less are excluded

CAUTION

quarter on Form 720.

from the 12% tax.

The tax is 12% (.12) of the sales price on the first retail

Ship Passenger Tax

sale of each unit. The tax applies to:

•

Transportation by water (IRS No. 29). A tax is imposed

Truck chassis and bodies except truck chassis and

on the operator of commercial ships. The tax is $3 for

bodies suitable for use with a vehicle with a gross vehicle

each passenger on a commercial passenger ship that

weight (GVW) of 33,000 pounds or less,

•

has berth or stateroom accommodations for at least 17

Trailer and semitrailer chassis and bodies except

passengers if the trip is over 1 or more nights. A voyage

trailer and semitrailer chassis and bodies suitable for use

extends “over 1 or more nights” if it lasts longer than 24

with a vehicle with a GVW of 26,000 pounds or less, and

•

hours. The tax also applies to passengers on any

Tractors of the kind chiefly used for highway

commercial ship that transports passengers engaged in

transportation in combination with a trailer or semitrailer,

gambling aboard the ship beyond the territorial waters of

except tractors that have a gross vehicle weight of

the United States. Enter the number of passengers for

19,500 pounds or less and a gross combined weight of

the quarter on the line for IRS No. 29.

33,000 pounds or less. Generally, gross combined weight

means the weight of a tractor and the weight of its

trailer(s).

Other Excise Tax

The sales price of a unit includes the sales price of

Obligations not in registered form (IRS No. 31). For

certain related parts and accessories sold on or in

obligations issued during the quarter, enter the principal

connection with the sale of the unit.

amount of the obligation multiplied by the number of

calendar years (or portion thereof) during the period

Figure the tax for each unit sold and enter the total for

beginning on the issue date and ending on the maturity

the quarter on the line for IRS No. 33.

date on the line for IRS No. 31.

Gross vehicle weight. The gross vehicle weight means

the maximum total weight of a loaded vehicle. Generally,

Manufacturers Taxes

this maximum total weight is the gross vehicle weight

rating provided by the manufacturer or determined by the

Do not include the excise tax on coal in the sales

seller of the completed article. The seller’s gross vehicle

price when determining which tax rate to use.

weight rating must be determined for excise tax purposes

CAUTION

on the basis of the strength of the chassis frame and the

axle capacity and placement. The seller may not take into

account any readily attachable components (such as tires

Underground mined coal (IRS Nos. 36 and 37). The

or rim assemblies) in determining the gross vehicle

tax on underground mined coal is the lower of $1.10 per

weight. See Regulations section 145.4051-1(e)(3) for

ton or 4.4% (.044) of the sales price. Enter on the line for

more information.

IRS No. 36 the number of tons of underground mined

coal sold at $25 or more per ton. Enter on the line for IRS

The following four classifications of truck body types

No. 37 the total sales price for all sales of underground

meet the suitable for use standard and will be excluded

mined coal sold at a selling price of less than $25 per ton.

from the retail excise tax.

•

Platform truck bodies 21 feet or less in length.

Surface mined coal (IRS Nos. 38 and 39). The tax on

•

Dry freight and refrigerated truck van bodies 24 feet or

surface mined coal is the lower of $.55 per ton or 4.4%

less in length.

(.044) of the sales price. Enter on the line for IRS No. 38

•

Dump truck bodies with load capacities of eight cubic

the number of tons of surface mined coal sold at $12.50

yards or less.

or more per ton. Enter on the line for IRS No. 39 the total

•

Refuse packer truck bodies with load capacities of 20

sales price for all sales of surface mined coal sold at a

cubic yards or less.

selling price of less than $12.50 per ton.

For more information, see Rev. Proc. 2005-19, which is

on page 832 of Internal Revenue Bulletin 2005-14 at

Taxable tires (IRS Nos. 108, 109, and 113). A tax is

imposed on taxable tires sold by the manufacturer,

producer, or importer at the rate of $.0945 ($.04725 in

Section 4051(d) tire credit. A tax credit may be taken

the case of a biasply tire or super single tire) for each 10

equal to the amount of tax that has been imposed on

pounds of the maximum rated load capacity over 3,500

each tire that is sold on or in connection with the first

pounds. Figure the tax for each tire sold in each category

retail sale of a taxable vehicle reported on IRS No. 33.

as shown in the chart on page 6 and enter the total for

Claim the section 4051(d) tire credit on Schedule C,

the quarter on the line for IRS No. 108, 109, or 113.

line 14a.

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2006 Page 5

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