Processing Delays for Paper Excise Tax Returns

Due to the pandemic, the IRS experienced delays in processing paper federal Excise tax forms, including Forms 720, 2290, 8849 and faxed requests for expedite copies of Form 2290 Schedule 1. Although the backlog of returns has been reduced, they are still working as quickly as possible to resolve the remaining inventory. Do not file duplicate forms, but for future filings the IRS encourage taxpayers to consider the ease, convenience and speed of electronically filing Forms 720, 2290 and 8849.

Excise Tax on Indoor Tanning Services

Amounts paid for tanning services are subject to a 10 percent excise tax under the Affordable Care Act. Taxable indoor tanning service means a service employing any electronic product designed to incorporate one or more ultraviolet lamps intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning. Indoor tanning service providers are responsible for collecting the tax from the person paying for the service and in some situations, from the person receiving the service. The person receiving the payment for the indoor tanning service must report the indoor tanning services tax on and remit the full amount of tax with a timely filed return.

PCORI Fee – Patient-Centered Outcomes Research Trust Fund Fee

The PCORI Trust Fund is collected and reported to the IRS in the Quarterly Federal Excise Tax Form 720 along  with the 2nd Quarter returns. August 2, 2021 is the due date and it has to be reported with the IRS and missing out the due date leads to penalties and extra charges.  Issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans are responsible for reporting and paying the PCORI fee.

The Further Consolidated Appropriations Act, 2020 (Pub. L. 116-94), signed into law on December 20, 2019, has extended the Patient-Centered Outcomes Research Trust Fund fee imposed by Internal Revenue Code sections 4375 and 4376 for 10 years. As a result of this extension, the Patient-Centered Outcomes Research Trust Fund fee will continue to be imposed through 2029.

Other Federal Excise Taxes reported in Form 720

Environmental Tax:

Dealers and sellers of crude oil, imported petroleum products, and ODC’s are subjected to file this excise tax return. Form 6627 is attached along with Form 720.

Communication Tax:

If you’re using local telephone services and teletypewriter exchange service, you’re liable to file this Quarterly Federal Communication Tax.

Air Transportation Tax:

Air transportation Tax needs to be filed by the Airline Company, providing a consolidated report about the passengers and the property handled through flights. Also, the usage of transportation facilities should be reported in this excise tax form.

Fuel Tax:

This involves the use and sell of diesel, kerosene, gasoline and LNG, included some Alternative fuels (LPG, CNG).

Retail Tax:

All manufacturers and sellers of highway vehicles such as bus, heavy trucks and truck tractors should file under this category.

Ship Passenger Tax:

The IRS imposes tax on certain ship voyages. This tax is applied annually on the person organizing the voyage, on the operator of commercial ships.

Foreign Insurance Tax:

Foreign issuers issuing policies such as indemnity bonds and casualty insurance are implied.

Manufacturer Tax:

This IRS excise tax applies to the seller and manufacturers of coal. This tax also involves one-time gas guzzler tax imposed on imported vehicles and vehicles driven by gasoline or diesel fuel with a minimum gross weight of 6,000 lbs.

Floor Stocks Tax

To figure the environmental tax on petroleum, ODCs – Ozone-depleting chemicals, imported products that used ODCs as materials in the manufacture or production of the product, and the floor stocks tax on ODCs. Attach the additional sheets with Form 6627 to Form 720, Quarterly Federal Excise Tax Return.

LUST tax

The leaking underground storage tank (LUST) tax on inland waterways fuel use, tax must be paid on any liquid fuel used on inland waterways that isn’t subject to LUST tax under section 4041(d) or 4081.

Some other excise taxes paid by manufacturer, producer, or importers are on Sport Fishing Equipment’s; Fishing rods and fishing poles, Electric outboard motors, Fishing tackle boxes, Arrow shafts.

Electronic  Filing for Form 720 at TaxExcise.com

Electronic filing is by and large the best way of reporting Quarterly Federal Excise Tax Form 720 returns with the IRS and get the best available resources. The most trusted and top rated website since 2007.

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