Form 720 is a quarterly excise tax return that some, but not all, businesses must file with the Internal Revenue Service. According to the IRS, "Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks." If you accrue excise taxes in the course of doing business, you should know the rules on filing 720 taxes.
Who Must File
If, as a business entity, you were liable for any of the federal excise taxes listed by the IRS on Form 720, Parts I and II, you must file the form. The excise taxes included in Part I are such items as petroleum spill taxes and ozone-depleting chemical tax; communications and air transportation taxes; fuel taxes for diesel, kerosene, gasoline, and other gases; coal and tire manufacturing taxes.
In Part II, the IRS enumerates such excise taxes as those related to the sales of sport fishing and archery, inland waterways fuel use taxes and biofuel sold, but not used as fuel.
Verification of Information
While you are not required to attach receipts to Form 720, the IRS requires that you keep copies of the records you used to fill out the form, as well as receipts of all transactions, to verify that you have submitted the correct payment amounts. You must keep records for at least four years from the date your taxes became due to verify all your information, including the exemptions you may have claimed on Form 720.
When You Must File
Since Form 720 is a quarterly document, you must file it four times per year on the following schedule: by April 30 for the first quarter, by July 31 for the second quarter, by October 31 for the third quarter and by January 31 for the final quarter. Even if you are not liable for excise taxes during any of the quarters of the year, you must send in Form 720 according to the due dates, indicating zero on the appropriate line(s) of the form. If you go out of business or your activity permanently changes so that you will no longer accrue excise taxes in the future, you must let the IRS know by filing a final 720 return, checking the "final return" box at the top of the form.
Visitors Also Saw
How to Amend a Colorado State Tax ReturnHow to Renew Child Tax CreditsWhat Is a Charging Provision?How to Prove Head of HouseholdHow do I Donate a Vehicle in Arizona?Taxes on Gifts From ParentsTax on Inheritance & GiftsHow to Calculate Fair Market Value of Household ItemsW-4 Tax Withholding QuestionsList of Tax Deductions for Self Employed