07-26-2024

Does My LLC Need to File Form 720

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Excise taxes are typically imposed on specific goods, such as gasoline, coal and communication equipment. They can also apply to activities or services, like air travel or indoor tanning services. Form 720 is used to report and pay these excise taxes to the IRS on a quarterly basis. Some common categories subject to excise taxes include:

·       Environmental Tax

·       Communications and Air Transportation Tax

·       Fuel Tax

·       Retail Tax

·       Ship passenger Tax

·       Foreign insurance Tax

·       Manufacturer Tax

Does LLC Need to File Form 720?

An LLC (Limited Liability Company) should file Form 720 correctly to avoid penalties and ensure smooth business operations. Some key factors to consider when determining the need to file include:

1)     This can be decided based on the nature of your business. If your business includes any of the below then they are subject to excise taxes,

ü  Domestic petroleum products

ü  Imported petroleum products

ü  Chemicals and imported chemical substances

ü  Local telephone service

ü  Teletypewriter exchange service

ü  Transportation of person/property by air

ü  Use of international air travel facilities

ü  Diesel Tax

ü  Diesel-Water fuel emulsion

ü  Dyed diesel

ü  Dyed Kerosene

ü  Lust Tax

ü  Gasoline Tax

ü  Kerosene tax

ü  LPG (Liquid Petroleum Gas)

ü  “P Series” Fuels

ü  CHG (Compressed Natural Gas)

ü  Liquified hydrogen

ü  LNG (Liquefied Natural Gas)

ü  Truck, Trailer and semitrailer chassis bodies and tractors

ü  Transportation by water

ü  Foreign insurance taxes

ü  Coal

ü  Vaccine

ü  Taxable tires

ü  Sport Fishing equipment

ü  Electric outboard motors

ü  Bows, quivers

ü  Arrow shafts

ü  Indoor tanning services

ü  Floor stock tax – Ozone depleting chemicals

ü  Biodiesel sold as but not used as fuel

ü  Repurchase of stock tax

ü  Sales of designated drug

ü  PCORI Tax

        Here is the List of all excise taxes along with IRS No.

2)     Since the tax regulations are complex it is always advised to consult a tax professional or accountant who can provide proper guidance

3)     State and local governments also impose excise taxes, so it is important to check whether your LLC is subject to any additional tax obligation at the state or local level.

4)     You can also refer the Instructions for Form 720 which is provided by IRS on their official website. There is an option to contact them directly too if you need guidance.

5)     Always maintain accurate and detailed records of all transactions subject to excise taxes to facilitate correct filing.

When and How Form 720 can be filed?

Form 720 is the Quarterly Federal Excise Tax Return. It must be filed for each quarter. Refer the table below,

QUARTER	DUE DATE
1st	Apr-30
2nd	Jul-31
3rd	Oct-31
4th	Jan-31

Form 720 can be filed using two methods: manual and online. Always choose the online method for the best filing experience. Use our IRS-approved online portal, eFile720 for smart and efficient filing.

Read our how to file form 720 electronically to get an idea of how 720 online filing works.

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