Basic things all businesses should know about excise tax
【《We Chinese in America》Media Editor Tang Zhao, August 2, 2022】As an ongoing effort to enhance our valuable service to We Chinese in America website readers, We Chinese in America website posts English and Chinese versions of “IRS News Release” ， “IRS Fact Sheets”， and “tax tips” directly received from IRS Media Relations Office in Washington, D.C.. We are pleased to take on this important role partnering with IRS to better inform the public.
Basic things all businesses should know about excise tax
Tax Tip 2022-116
August 1, 2022
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
(Source: IRS Tax Tips)
Internal Resource Service
Media Relation Office
Washington, D. C
Media Contact: 202 317 4000
Public Contact: 800 829 1040
This website has a free subscription function, please enter your email address and name (any nickname) in the upper right corner of the page. After subscribing, you can receive timely updates of the website. I hope that new and old readers will actively subscribe, so that we have the opportunity to provide you with better services
Please click: Home (wechineseus.com) for more news and content on this website
Follow The Chinese Media's Twitter account: https://twitter.com/wechineseinus
Follow The Chinese Media's Facebook account: https://www.facebook.com/wechineseinamerica/
