Instructions For Form 720 - 2017 (Page 6 of 20) in pdf

Administration under subpart K of part 91 title 14, Code of

Fuel

Tax Rate

Federal Regulations, and is registered in the United States.

per Gallon

Fractional program aircraft are not considered used for

Qualified—

transportation of a qualified fractional owner, or on account of

Ethanol produced from coal

.184

. . . . . . . . . . . . . . . . .

such qualified fractional owner when they are used for flight

Methanol produced from coal

.184

. . . . . . . . . . . . . . . .

Partially exempt—

demonstration, maintenance, or crew training. In such

Ethanol produced from natural gas

.114

situations, the flight is not commercial aviation. Instead, the

. . . . . . . . . . . . .

Methanol produced from natural gas

.0925

tax on the fuel used in the flight is imposed at the

. . . . . . . . . . . .

B100 (100% biodiesel)

.244

noncommercial aviation rate.

. . . . . . . . . . . . . . . . . . . . . .

Liquefied gas derived from biomass

.184

. . . . . . . . . . . . . .

Fractional owner. Any person owning any interest

Other fuels not shown

.184

. . . . . . . . . . . . . . . . . . . . . . .

(including the entire interest) in a fractional program aircraft.

Drylease aircraft exchange. An agreement, documented

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

by the written program agreements, under which the

on removal at the terminal rack, report these gallons on

fractional program aircraft are available, on an as-needed

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

basis without crew, to each fractional owner.

other than removal at the terminal rack, report these gallons

Special rule relating to deadhead service. A fractional

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

program aircraft will not be considered to be used on account

you have blended alcohol with taxed gasoline outside of the

of a qualified fractional owner when it is used in deadhead

bulk transfer/terminal system, report these gallons of alcohol

service and a person other than a qualified fractional owner is

on line 62(b).

separately charged for such service.

Multiply the total number of gallons subject to tax on lines

More information. See section 4043 for more information

(a) and (b) by $.184. Combine the tax for lines (a) and (b) and

on the surtax.

make one entry in the tax column.

Aviation gasoline (IRS No. 14). Aviation gasoline is taxed

Also see Schedule T. Two-Party Exchange Information

at the rate shown on Form 720.

Reporting, later, if applicable.

Also, a surtax of $.141 per gallon applies on fuel used in

Surtax on any liquid used in a fractional ownership pro

an aircraft which is part of a fractional ownership program.

gram aircraft as fuel (IRS No. 13). Fuel used in a

fractional ownership program aircraft, as defined below, after

For further information on fractional ownership program

aircraft, see Surtax on any liquid used in a fractional

March 31, 2012, is subject to a surtax of $.141 per gallon.

ownership program aircraft as fuel (IRS No. 13), earlier.

The fractional ownership program manager is liable for the

surtax. If you are liable, report these gallons on the line for

Alternative fuel (IRS Nos. 112, 118, and 120–124).

IRS No. 13.

Alternative fuel is any liquid other than gas oil, fuel oil, or any

The surtax applies in addition to any other taxes imposed

product taxable under section 4081. You are liable for tax on

on the removal, entry, use, or sale of the fuel. If the surtax is

alternative fuel delivered into the fuel supply tank of a motor

imposed, the flight is not considered commercial aviation.

vehicle or motorboat, or on certain bulk sales. Report the tax

Instead, the tax on the fuel used in the flight is imposed at the

on the line for the IRS No. listed in the following table.

noncommercial aviation rate of $.219 per gallon (IRS No. 69).

If the surtax is imposed, the following taxes do not apply.

Alternative Fuel

IRS Number

Transportation of persons by air (IRS No. 26).

Liquefied petroleum gas (LPG)

112

Transportation of property by air (IRS No. 28).

Use of international air travel facilities (IRS No. 27).

“P Series” fuels

118

Fractional ownership aircraft program is a program under

Compressed natural gas (CNG)

120

which:

Liquefied hydrogen

121

A single fractional ownership program manager provides

fractional ownership program management services on

Fischer-Tropsch process liquid fuel from coal

122

(including peat)

behalf of the fractional owners;

There are one or more fractional owners per fractional

Liquid fuel derived from biomass

123

program aircraft, with at least one fractional program aircraft

Liquefied natural gas (LNG)

124

having more than one owner;

For at least two fractional program aircraft, none of the

ownership interests in the aircraft are less than the minimum

For sales or uses after December 31, 2015, the following

fractional ownership interest or held by the program

gasoline gallon equivalent (GGE) or diesel gallon equivalent

manager;

(DGE) applies.

There exists a dry-lease aircraft exchange arrangement

LPG (includes propane, butane, pentane, or mixtures of

among all of the fractional owners; and

those gases), taxed at $.183 per GGE, has a GGE of 5.75

There are multi-year program agreements covering the

pounds or 1.353 gallons of LPG.

fractional ownership, fractional ownership program

LNG, taxed at $.243 per DGE, has a DGE of 6.06 pounds

management services, and dry-lease aircraft exchange

or 1.71 gallons of LNG.

aspects of the program.

CNG, taxed at $.183 per GGE, has a GGE of 5.66 pounds

or 123.57 cubic feet of CNG.

Fractional program aircraft. Any aircraft that, in any

fractional ownership aircraft program, is listed as a fractional

Example. 10,000 gallons of LNG ÷ 1.71 = 5,848 DGE x

program aircraft in the management specifications issued to

$0.243 = $1,421.06 tax.

the manager of such program by the Federal Aviation

Instructions for Form 720 (Rev. 12017)

Instructions For Form 720 - 2017 Page 6

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