IRS Form 720 Explained: Quarterly Federal Excise Tax Made Simple

Filing federal excise taxes can feel complicated, but it doesn’t have to be. Whether your business deals with fuel, environmental products, tires, or air transportation, IRS Form 720 makes it possible to report and pay quarterly excise taxes efficiently.

In this guide, we’ll explain what IRS Form 720 is, who needs to file it, what taxes it covers, and how to stay compliant — all in simple terms.



What Is IRS Form 720?

IRS Form 720, officially called the Quarterly Federal Excise Tax Return, is a tax form used by businesses that produce, sell, or use specific goods and services subject to excise taxes.

Excise taxes are not income taxes — instead, they apply to certain products or activities like fuel, air transportation, and chemical manufacturing. The IRS uses Form 720 to collect these taxes and fund important federal programs related to transportation, environment.

Form 720 must be filed every quarter by any business responsible for excise tax collection or payment.

Why the IRS Requires Form 720

The IRS requires Form 720 to ensure proper collection of excise taxes that help fund federal infrastructure and environmental initiatives. Excise taxes serve two major purposes:

  1. Revenue Generation: Funding public programs like highway maintenance and environmental cleanup.

  2. Regulation: Encouraging responsible use of taxable goods, such as fuel or ozone-depleting chemicals.

For businesses, timely filing ensures compliance, avoids penalties, and maintains good standing with the IRS.

Types of Excise Taxes Covered by Form 720

Form 720 includes multiple categories of excise taxes. Below are the key groups your business might need to report.

Fuel Taxes

Covers gasoline, diesel, kerosene, and aviation fuels.
Businesses involved in manufacturing, selling, or importing these products must calculate and pay fuel-related excise taxes quarterly.

Environmental Taxes

These apply to certain chemicals and ozone-depleting substances.
Examples include imported chemical substances under Form 6627, which accompanies Form 720 for detailed reporting.

PCORI Fee (Patient-Centered Outcomes Research Institute Fee)

This tax applies mainly to self-insured employers and health insurance issuers.
It funds medical research designed to improve healthcare outcomes across the U.S.

Communications Taxes

Applies to services like telephone, cable, and satellite communications.
Businesses offering these services must file the corresponding section of Form 720.

Air Transportation Taxes

Covers passenger, cargo, and air freight services.
If your business operates in air transportation, you’ll need to report both passenger and segment taxes quarterly.

Who Needs to File Form 720

You must file Form 720 if your business:

  • Manufactures or sells taxable goods (like fuel or tires)

  • Imports taxable products into the U.S.

  • Operates air transportation or communications services

  • Maintains a self-insured health plan subject to the PCORI fee

Even if you have no excise tax liability in a given quarter, you may still need to submit a “no tax due” filing to stay compliant.

How Often Form 720 Is Filed

Form 720 is filed quarterly, according to the IRS schedule:

QuarterPeriod CoveredFiling Deadline
Q1January – MarchApril 30
Q2April – JuneJuly 31
Q3July – SeptemberOctober 31
Q4October – DecemberJanuary 31

Timely filing ensures your business avoids penalties and interest.

Key Things to Know Before Filing Form 720

Here are a few important points to remember before submitting your Form 720:

  • Use an IRS-Authorized E-File Provider: E-filing through trusted systems like Excise720 ensures accuracy, speed, and security.

  • Check for Required Schedules: Depending on your taxes, you may need to attach additional forms like Schedule A, Schedule T, Form 6627

  • Confirm Payment Options: Payments can be made electronically via EFTPS (Electronic Federal Tax Payment System) - EFW (Electronic Funds Withdrawal).

  • Keep Records: Always maintain a copy of your submission and IRS acknowledgment for your files.

How to File IRS Form 720 Easily

The easiest way to file Form 720 is through an IRS-approved e-file provider like Excise720 
With Excise720, you can:

  • Prepare your Form 720 and all schedules accurately

  • Submit electronically to the IRS within minutes

  • Get real-time filing status updates

  • Receive instant confirmation of submission

Excise720 simplifies excise tax filing for businesses of all sizes - fast, secure, and fully IRS-compliant.

Final Thoughts

Filing excise taxes doesn’t have to be overwhelming. With a clear understanding of IRS Form 720 and a trusted e-filing solution like Excise720, you can stay compliant, save time, and file with confidence every quarter.

Ready to file your Form 720?
Visit Excise720.com today and make your excise tax filing simple, fast, and secure.

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