Does Your Business Need to File Form 720?

If your business deals with products or services that fall under federal excise tax laws, filing IRS Form 720 (Quarterly Federal Excise Tax Return) isn’t optional—it’s a compliance requirement. Many business owners aren’t aware that the products they sell or services they provide may trigger excise tax obligations. But understanding these rules is essential to avoid penalties and ensure smooth operations.

This guide from Excise720 breaks down everything you need to know, including when Form 720 is required, which businesses must file, and how to stay compliant throughout the tax year.

What Is IRS Form 720?

The federal government imposes excise tax on specific goods, services, and activities—similar to state sales tax, but applied only to certain industries. Most consumers never notice it because the excise tax amount is built into the price of the product, like:

• The gasoline you buy

• Airline tickets

• Certain fuels and chemicals

• Firearms and fishing equipment

• Indoor tanning services

While consumers indirectly pay this tax, the responsibility for collecting and remitting it lies with the business, manufacturer, or service provider. That’s where Form 720 comes in.

IRS Form 720 - officially known as the Quarterly Federal Excise Tax Return—is used by businesses to report and pay federal excise taxes. The form includes:

• Part I & Part II: Lists of excise taxes for various industries

• Schedule A: For deposits

• Schedule C: Claims

• Schedule T: Two-party exchanges (fuel industry)

• Form 720-V: Payment voucher, if paying by check

Does Your Business Need to File Form 720?

The IRS uses two main criteria to determine whether your business must file Form 720:

 1. You Had Excise Tax Liability in Any Previous Quarter

If your business was liable for ANY of the excise taxes listed in Parts I or II of Form 720 in a previous quarter—and you have not filed a final return—you must continue filing quarterly, even if your liability is zero this quarter.

 2. You Have Excise Tax Liability in the Current Quarter

If you currently sell, manufacture, import, or provide any products/services listed on Form 720, you must file for that quarter.

Some common taxable categories include:

• Fuel & environmental taxes

• Communications & air transportation

• Foreign insurance policies

• Inland waterways

• Fishing equipment

• Vaccines

• Indoor tanning services

• Ozone-depleting chemicals (ODCs)

• Trucks/trailers & retail tax on heavy vehicles

• Biofuel & chemical sales

• Manufacturer’s excise taxes

If your business deals in alcohol, tobacco, or firearms, note that these are not filed on Form 720—they fall under the TTB (Alcohol and Tobacco Tax and Trade Bureau) and must be filed separately.

When Do You Need to File Form 720?

Form 720 must be filed every quarter, with deadlines as follows:

Quarter	Coverage Period	Filing Deadline
Q1	Jan 1 – Mar 31	April 30
Q2	Apr 1 – Jun 30	July 31
Q3	Jul 1 – Sep 30	October 31
Q4	Oct 1 – Dec 31	January 31

If your business is responsible for communications or air transportation taxes, you may need to make semimonthly deposits, per IRS guidelines.

Missing these deadlines can lead to IRS penalties—another reason businesses prefer e-filing for timely submissions.

What Taxes Are Reported on Form 720?

Form 720 includes multiple categories of excise taxes. Each tax line corresponds to a specific IRS tax number. Some examples include:

• Diesel fuel taxes

• Biodiesel/blended fuel taxes

• Kerosene taxes

• ODC taxes

• Truck & trailer retail tax (12% tax)

• Fishing equipment tax

• Vaccine tax

• Indoor tanning tax

Amounts are usually based on gallon, weight, or unit calculations.
Example: Diesel fuel tax may be calculated per gallon—simply multiply gallons sold by the IRS rate.

How to File Form 720 Efficiently

You can file Form 720 in two ways:

E-File Online (Fastest & Recommended)

Using an IRS-authorized platform like Excise720.com gives you:

• Built-in accuracy checks

• Instant IRS submission & confirmation

• Easy guided filing

• Secure data encryption

• No printing or mailing

• Faster processing

 Paper Filing (Traditional Method)

     Paper filing is still allowed, but it requires:

• Printing the form

• Manually entering data

• Mailing to the IRS

• Waiting for manual processing

This increases the chances of mistakes and delays, which is why most businesses now prefer e-filing.

Why Understanding Form 720 Matters

Filing Form 720 isn’t just about compliance it impacts:

• Cash flow management

• Avoiding costly IRS penalties

• Proper accounting for fuel and environmental activities

• Accurate documentation for audits

Mastering Form 720 ensures your business remains in good standing while keeping operations running smoothly.

The Bottom Line

If your business sells or provides any excise-taxable product or service, you likely need to file IRS Form 720 every quarter. Knowing whether you fall under these categories—and staying ahead of deadlines is essential for compliance.

And the good news? Filing doesn’t have to be complicated.

Looking for a professional, fast, and IRS-authorized way to file Form 720?

👉 File your Form 720 online with Excise720 today.
Simple steps. Secure filing. Instant confirmation.