Tax Tip 2022-116: Basic things all businesses should know about excise tax

IRS Tax Tips

August 1, 2022

Issue Number:? Tax Tip 2022-116

Basic things all businesses should know about excise tax

Excise tax is an indirect tax on specific goods, services and activities. Federal excise tax is usually imposed on the sale of things like fuel, airline tickets, heavy trucks and highway tractors, indoor tanning, tires, tobacco and other goods and services.

Businesses that are subject to excise tax generally must file a Form 720, Quarterly Federal Excise Tax Return to report the tax to the IRS.

This tax is commonly included in the cost of the product. While the end consumer doesn?t usually see the excise tax on their receipt, it may be charged at the time of

Import
Sale by the manufacturer
Sale by the retailer
Use by the manufacturer or consumer

Many excise taxes go into trust funds for projects related to the taxed product or service, such as highway and airport improvements. Excise taxes are independent of income taxes. Often, the retailer, manufacturer or importer must pay the excise tax to the IRS and file the Form 720.

Some excise taxes are collected by a third party. The third party then sends the tax to the IRS and files the Form 720. For example, the tax on an airline ticket generally is paid by the purchaser and collected by the airline.

When to file
Businesses must file the form for each quarter of the calendar year. Here are the due dates:

Quarter 1 ? January, February, March: deadline, April 30
Quarter 2 ? April, May, June: deadline, July 31
Quarter 3 ? July, August, September: deadline, Oct. 31
Quarter 4 ? October, November, December: deadline, Jan. 31

If the deadline for filing a tax return falls on a Saturday, Sunday or legal holiday, the due date is the next business day.

How to file
The IRS does accept paper excise tax returns. However, electronic filing is strongly encouraged, when possible. To make this process easier for taxpayers, the contact information for all approved e-file transmitters of excise forms is listed on IRS.gov. Businesses can submit forms online 24 hours a day.

When businesses e-file, they get confirmation that the IRS received their form. Also, e-filing reduces processing time and errors. To electronically file, business taxpayers will have to pay the provider's fee for online submission.

The excise tax forms available for electronic filing are:
Form 720, Quarterly Federal Excise Tax Return
Form 2290, Heavy Highway Vehicle Use Tax
Form 8849, Claim for Refund of Excise Taxes, Schedules 1, 2, 3, 5, 6 and 8

Share this tip on social media -- #IRSTaxTip: Basic things all businesses should know about excise tax http://ow.ly/yPIt50K6R07

?? ?? ?

Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov.

This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page. You will need to use your email address to log in. If you have questions or problems with the subscription service, please contact subscriberhelp.govdelivery.com.

This service is provided to you at no charge by the Internal Revenue Service (IRS).

This email was sent to [email protected] by: Internal Revenue Service (IRS) ? Internal Revenue Service ? 1111 Constitution Ave. N.W. ? Washington DC 20535

Useful Links:

News Essentials

The Newsroom Topics

IRS Resources

Issue Number:? Tax Tip 2022-116