Manufacturer Excise Taxes: Form 720 Filing Guide

Manufacturer Excise Taxes at a Glance

Other manufacturers' excise taxes, including certain sport fishing and archery equipment taxes, are reported separately in Part II of Form 720.

What Are Manufacturer Excise Taxes?

Manufacturer Excise Taxes are federal taxes imposed on the sale or use of certain taxable products manufactured, produced, or imported into the United States.

For federal excise tax purposes, a manufacturer can generally include a:

• Manufacturer
• Producer
• Importer

The applicable tax depends on the type of product and the specific federal excise tax rules that apply.

Manufacturer Excise Taxes are generally reported on Form 720, Quarterly Federal Excise Tax Return.

Who May Be Responsible for Manufacturer Excise Tax?

The person responsible for Manufacturer Excise Tax depends on the taxable product.

Businesses that may need to report these taxes include:

• Manufacturers
• Producers
• Importers
• Coal producers
• Tire manufacturers and importers
• Automobile manufacturers and importers
• Vaccine manufacturers and importers

A taxable event can also occur when a manufacturer uses certain taxable products instead of selling them.

Businesses should first identify the taxable product and then determine which Form 720 IRS number applies.

Coal Excise Tax — IRS Nos. 36, 37, 38 and 39

Federal excise tax generally applies to the first sale of coal mined in the United States.

The coal producer is generally responsible for the tax.

Underground-Mined Coal

The tax on underground-mined coal is generally the lower of:

• $1.10 per ton, or
• 4.4% of the sales price.

Underground-mined coal is reported under IRS Nos. 36 and 37.

Surface-Mined Coal

The tax on surface-mined coal is generally the lower of:

• $0.55 per ton, or
• 4.4% of the sales price.

Surface-mined coal is reported under IRS Nos. 38 and 39.

Businesses should correctly identify the type of coal and applicable sales information before calculating the tax.

Taxable Tire Excise Tax — IRS Nos. 108, 109 and 113

Federal excise tax applies to certain taxable tires sold by a manufacturer, producer, or importer.

The tax generally applies to tires of a type used on highway vehicles and is calculated using the tire's maximum rated load capacity.

Form 720 uses different IRS numbers depending on the type of tire:

• IRS No. 108 — certain taxable tires other than bias ply or super single tires
• IRS No. 109 — certain bias ply or super single tires
• IRS No. 113 — certain super single tires designed for steering

Because the calculation depends on the type of tire and load capacity, businesses should correctly classify taxable tires before calculating the excise tax.

Certain tires can qualify for an exemption or different treatment under applicable IRS rules.

Gas Guzzler Tax — IRS No. 40

The Gas Guzzler Tax applies to the sale by a manufacturer of certain automobiles that do not meet applicable fuel economy standards.

The tax is reported on Form 720 under IRS No. 40.

The amount of tax depends on the automobile's fuel economy rating. Automobiles with lower fuel economy ratings can be subject to higher tax amounts.

Form 6197, Gas Guzzler Tax, is used to calculate the tax and is filed with Form 720.

Certain vehicles are excluded from the Gas Guzzler Tax under federal rules.

Because the amount depends on the vehicle's fuel economy classification, manufacturers should use the applicable Form 6197 information when calculating the tax.

Vaccine Excise Tax — IRS No. 97

A federal excise tax applies to certain taxable vaccines sold by a manufacturer, producer, or importer.

The tax is generally $0.75 per dose of each taxable vaccine.

When a single dose contains more than one taxable vaccine, the tax generally applies to each taxable vaccine component included in the dose.

Taxable vaccines include certain vaccines against diseases such as:

• Influenza
• Measles
• Mumps
• Rubella
• Polio
• Hepatitis A
• Hepatitis B
• Tetanus
• Diphtheria
• Pertussis
• Chickenpox
• Rotavirus
• Human papillomavirus
• Certain pneumococcal diseases
• Meningococcal disease

The applicable tax is reported under IRS No. 97.

What About Sport Fishing and Archery Equipment?

Certain sport fishing and archery products are also subject to federal manufacturers excise taxes.

These can include:

• Sport fishing equipment
• Fishing rods and poles
• Electric outboard motors
• Fishing tackle boxes
• Bows
• Quivers
• Broadheads and points
• Arrow shafts

However, these taxes are reported in Part II of Form 720.

Businesses responsible for these products should use the applicable Part II IRS number and tax calculation rather than reporting them with the Part I manufacturer categories listed above.

How Are Manufacturer Excise Taxes Calculated?

There is no single tax rate for all Manufacturer Excise Taxes. The calculation depends on the taxable product.

• Coal: Generally calculated using the applicable tonnage rate or percentage of sales price.
• Taxable Tires: Generally calculated according to tire classification and maximum rated load capacity.
• Gas Guzzler Automobiles: Calculated according to the automobile's fuel economy rating using Form 6197.
• Vaccines: Generally calculated based on the number of doses and taxable vaccine components.

Businesses should identify the correct product category and IRS number before calculating the tax.

Manufacturer Excise Tax Exemptions

Certain transactions may qualify for an exemption or tax-free treatment when applicable IRS requirements are satisfied.

Depending on the product and transaction, special rules can apply to qualifying:

• Exports
• Sales for further manufacture
• Sales to state or local governments
• Sales to certain nonprofit educational organizations
• Certain vessel supplies
• Other specifically exempt uses or purchasers

The same exemption rules do not apply to every Manufacturer Excise Tax.

Businesses should verify the requirements for the particular product before treating a transaction as tax-free.

Form 637 and Certain Tax-Free Transactions

Some federal excise tax transactions require registration with the IRS.

Form 637, Application for Registration (For Certain Excise Tax Activities), is used for certain excise tax activities that require registration.

Depending on the transaction, a manufacturer or purchaser may need appropriate registration and supporting documentation before a sale can receive tax-free treatment.

Not every Manufacturer Excise Tax exemption requires Form 637. Businesses should determine whether registration is required for the specific transaction and maintain the appropriate documentation.

Credits and Refunds

Certain Manufacturer Excise Taxes may qualify for a credit or refund when applicable IRS requirements are met.

Depending on the product and circumstances, this can include certain tax-paid articles that are later:

• Exported
• Used for a qualifying tax-free purpose
• Sold for a qualifying tax-free purpose
• Returned
• Subject to an applicable adjustment

Applicable credits and claims may be reported using Schedule C (Form 720) or another IRS claim procedure.

The requirements vary depending on the tax and transaction.

When Are Manufacturer Excise Taxes Reported?

Applicable Manufacturer Excise Taxes are generally reported quarterly on Form 720.

If the due date falls on a Saturday, Sunday, or legal holiday, the filing deadline generally moves to the next business day.

Certain Manufacturer Excise Taxes may also be subject to separate federal excise tax deposit requirements.

When your applicable manufacturer tax information is ready, you can prepare and electronically file Form 720 with Excise720.

How to Prepare for Manufacturer Excise Tax Filing

Before preparing Form 720, identify the taxable products sold or used during the applicable reporting period. Useful information can include:

Only gather the information that applies to the Manufacturer Excise Tax your business is reporting.

Once the required information is available, Excise720 can be used to prepare and e-file Form 720 for applicable Manufacturer Excise Taxes.

Common Manufacturer Excise Tax Filing Mistakes

• Using the wrong IRS number: Coal, taxable tires, gas guzzler automobiles, and vaccines use different Form 720 IRS numbers.
• Applying the wrong tax calculation: Each manufacturer tax has its own rate or calculation method.
• Incorrectly classifying taxable tires: Tire tax depends on the tire category and applicable load capacity.
• Incorrect coal reporting: Underground-mined and surface-mined coal use different Form 720 reporting numbers and tax limits.
• Missing Form 6197: Gas Guzzler Tax requires Form 6197 to calculate the applicable tax.
• Incorrect vaccine calculations: A dose containing multiple taxable vaccines can result in tax for each taxable vaccine component.
• Claiming an exemption without support: Tax-free treatment may require specific documentation or registration.
• Missing deposit requirements: Certain Manufacturer Excise Taxes may have separate federal deposit obligations.

Manufacturer Excise Tax Filing Checklist

Before filing, confirm that you have:

1. Identified the taxable product.
2. Selected the correct IRS number.
3. Determined who is responsible for the tax.
4. Used the correct tax calculation.
5. Gathered applicable sales or quantity records.
6. Reviewed available exemptions.
7. Maintained required exemption documentation.
8. Reviewed Form 637 requirements when applicable.
9. Included Form 6197 when required.
10. Reviewed applicable deposit requirements.
11. Checked available credits or refunds.
12. Maintained supporting records.

Manufacturer Excise Tax Filing Pricing

Frequently Asked Questions