Instructions For Form 720 - Quarterly Federal Excise Tax Return

Manufacturers Taxes

Foreign Insurance Taxes

Policies issued by foreign insurers (IRS No. 30).

Do not include the excise tax on coal in the sales

Enter the amount of premiums paid during the quarter on

price when determining which tax rate to use.

policies issued by foreign insurers. Multiply the premiums

CAUTION

paid by the rates listed on Form 720 and enter the total

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

for the three types of insurance on the line for IRS

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

No. 30.

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

Who must file. The person who pays the premium to

IRS No. 36 the number of tons of underground mined

the foreign insurer (or to any nonresident person such as

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

a foreign broker) must pay the tax and file the return.

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

Otherwise, any person who issued or sold the policy, or

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

who is insured under the policy, is required to pay the tax

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

and file the return.

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

Treaty-based return positions under section 6114.

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

Foreign insurers and reinsurers who take the position

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

that a treaty of the United States overrules, or otherwise

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

modifies, an Internal Revenue law of the United States,

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

must disclose such position. This disclosure must be

selling price of less than $12.50 per ton.

made once a year on a statement which must report the

Taxable tires (IRS No. 66). A tax is imposed on taxable

payments of premiums that are exempt from the excise

tires sold by the manufacturer, producer, or importer at

tax on policies issued by foreign insurers for the previous

the rate of $.0945 ($.04725 in the case of a biasply tire or

calendar year. This statement is filed with the 1st quarter

super single tire) for each 10 pounds of the maximum

Form 720, which is due before May 1 of each year.

rated load capacity over 3,500 pounds.

You may be able to use Form 8833, Treaty-Based

A taxable tire is any tire of the type used on highway

Return Position Disclosure Under Section 6114 or

vehicles if wholly or partially made of rubber and if

7701(b), as a disclosure statement.

marked according to federal regulations for highway use.

How to file. At the top of Form 720, write “Section

A biasply tire is a pneumatic tire on which the ply cords

6114 Treaty.” Provided you have no other transactions

that extend to the beads are laid at alternate angles

reportable on Form 720:

substantially less than 90 degrees to the centerline of the

tread. A super single tire is a tire greater than 13 inches

1. Check the one-time filing box on page 1 of Form

in cross section width designed to replace 2 tires in a

720. If this is your final return, check the final return box.

dual fitment, but does not include any tire designed for

2. Write “None” on lines 1 and 3.

steering. Super single tires designed for steering are

3. Sign the return.

taxable at the rate of $.0945, retroactive to

January 1, 2005.

You need an EIN to file Form 720. If you do not have

an EIN, see Employer Identification Number (EIN) on

Taxpayers must file Form 720X to report the

page 3.

$.04725 tax rate increase on super single tires

Where to file. Mail the Form 720 with the attached

designed for steering, reported on Forms 720 for

CAUTION

statement to: Internal Revenue Service Center, P.O. Box

the first and second calendar quarters of 2005.

21086, Philadelphia, PA 19114. Also, see the Caution

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

under Private Delivery Services on page 3.

the quarter on the line for IRS No. 66.

Exception. If you are reporting liabilities in Parts I or II

Gas guzzler tax (IRS No. 40). Use Form 6197, Gas

(Form 720), follow the instructions for How to file above,

Guzzler Tax, to figure the liability for this tax. Attach

except mail the Form 720 to: Internal Revenue Service

Form 6197 to Form 720. The tax rates for the gas guzzler

Center, Cincinnati, OH 45999-0009.

tax are shown on Form 6197.

Vaccine taxes (IRS No. 97). A tax is imposed on the

Part II

sale or use of a vaccine manufactured, produced, or

entered into the United States at $.75 per dose if it:

Sport fishing equipment (other than fishing rods and

•

Contains diptheria toxoid, tetanus toxoid, pertussis

fishing poles)(IRS No. 41). The tax on sport fishing

bacteria, extracted or partial cell bacteria, specific

equipment is 10% (.10) of the sales price. The tax is paid

pertussis antigens, or polio virus;

by the manufacturer, producer, or importer. Taxable

•

Is against measles, mumps, rubella, hepatitis A,

articles include reels, fly fishing lines (and other lines not

hepatitis B, chicken pox, or rotavirus gastroenteritis;

over 130 pounds test), fishing spears, spear guns, spear

•

Is any HIB (haemophilus influenza type B) vaccine;

tips, terminal tackle, fishing supplies and accessories,

•

Is any conjugate vaccine against streptococcus

and any parts or accessories sold on or in connection

pneumoniae; or

with these articles. See Publication 510 for a complete

•

Is any trivalent vaccine against influenza.

list of taxable articles. Add the tax on each sale during

If any taxable vaccine is combined with one or more

the quarter and enter the total on the line for IRS No. 41.

additional taxable vaccines, then the tax is imposed on

Fishing rods and fishing poles (IRS No. 110). The tax

each vaccine included in the combination.

on fishing rods and fishing poles (and component parts)

Example. MMR contains three taxable vaccines:

taxed at a rate of 10% will have a maximum tax of $10,

measles, mumps, and rubella. The tax per dose on MMR

effective for articles sold by the manufacturer, producer,

is $2.25 (3 x $.75).

or importer after September 30, 2005. Add the tax on

Add the tax for each taxable vaccine and enter the

each sale during the quarter and enter the total on the

total tax on the line for IRS No. 97.

line for IRS No. 110.

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Instructions For Form 720 - Quarterly Federal Excise Tax Return - 2005 Page 6

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