Learn About Jet Fuel Excise Tax
An excise tax is placed on jet fuel for the purpose of funding aviation infrastructure and programs. Businesses that sell, distribute, or utilize jet fuel are obligated to comply with these tax responsibilities. Taxpayers are obliged to submit jet fuel excise tax reports along with their Form 720 – the Quarterly Federal Excise Tax Return. Filing the form correctly helps in avoidance of penalties or interest resulting from negligence and assists in meeting other federal compliance regulations.
Which Operators Are Required to File Form 720 On Jet Fuel Excise Tax?
The excise tax applies to all individuals and entities engaged in the production, distribution and or use of jet fuel. This means aircraft operators, fuel suppliers and fixed base operators (FBOs). There are several exemptions. However, exemptions given to some military and federal agencies must be documented within some form. Knowing if you had to file, met certain requirements, is the first step to compliance.
Detailed Instructions for Completing Form 720
- Order From the 720: This could either be downloaded directly from the IRS website, or filed electronically.
- Business Information Section: Enter the business name, EIN and tax period.
- Report Jet Fuel Taxes in Part I: Find the jet fuel tax section and write down the total gallons consumed or sold.
- Calculate Tax Due: Compute the total gallons multiplied by the total excise tax rate.
- Complete Schedule A & T: If relevant, include details of fuel purchases and sell transactions and offset any claims.
- Submit and Pay: Submit the form in person, electronically, or by post and pay taxes before the deadline.
Filing Deadlines and Compliance Tips
Form 720 is due yearly on the last day of the month following each quarter: March 31, June 30, and Sept 30. There is a penalty for submitting late, so be sure to include these dates on your calendar. Keeping detailed logs of fuel deployment, collaborating with tax experts, and filing online can help simplify the reporting process. Along with the jet fuel excise tax regulations, filing reports correctly can help the business reduce expenses.
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