Electricity Excise Tax: A Complete Guide

Electricity excise tax is yet another unique, federal tax which applies to sale or use of electricity in the United States. It is the will of the government for companies that generate, transmit, or market electricity to file and pay this tax. This guide will explain who needs to file, filing for the management of a construction deal, filing the management deal variant using Form 720, and e-filing.

What Is Known With the Term Electricity Excise Tax?

Electricity Excise Tax is a system in the United States where utility companies are taxed whenever the generation and sale of electricity are made. The rationale for that is the further development of government funded services or infrastructure. Taxes of this nature are levied on the sale of electricity for commercial purposes with the exception of the sale for household or government purposes in certain instances.

Who is Required to File?

  • Electricity Generation Companies: For every company that has activities such as the generation of power and sales to end users or distributors then submission of excise tax is a must.
  • Electricity Distributors: This tax is also applicable to those people who purchase electricity or other sources of energy and resell it to clients or institutions.
  • Electricity Resellers: It involves companies that buy power in large quantities and sell it to smaller business entities or end customers.

In case any of such activities is being carried out by your company, then Electricity Excise Tax has to be filed.

Company Categories for Filing

It is notable that not all the companies have a chance to avail of Electricity Excise Tax regardless of their turnover with electricity; some have been classed as taxpayers in the tax supply framework as follows their excise levies to import types.

They are:

  • Generators: Companies involved in electricity production mainly in power plants.
  • Distributors: Organisations that use power plants to supply electricity to end users.
  • Resellers: Companies that buy electricity and then resell it to third parties.

This means that every category is taxed in accordance with the nature of their businesses, and filing obligations might also differ from one company to another based on its volume of sales and size.

Filing with Form 720

IRS Form 720, referred to as the Quarterly Federal Excise Tax Return, is the form used for reporting the Electricity Excise Tax. In relation to tax, it deals with filing and reporting several fuel and other excise taxes such as transportation tax, and electricity tax on the consumption of electricity.

Key Information Required for Form 720:

  • Taxpayer Identification Number (TIN): Federal tax identification number associated with the corporation.
  • Taxable Transactions – Electricity Sales or Use Subject to Excise Tax.
  • Calculation of Tax: Total electricity sold out during the period of return and total electricity taxes.

The Federal Excise Tax return is filed in a period of every four months, although there may be some returns which are declared late and fines and interests may come up.

E-Filing with Us

E-filing is the best method of submission for Form 720. In case you choose to efile:

  • Save Time: No need for mailing; the process is instant.
  • Accuracy: Our platform offers all the features and functions that perfect every calculation and all IRA requirements are adhered to.
  • Secure: Data is sent through these connections in an encrypted form for security reasons.

You can use the e-filing services provided by our site to complete Electricity Excise Tax Form 720. You will be notified as soon as you file. You can also contact us and we will be there to help you at every step.

Why E-File?

  • Convenience: File from anywhere or at any time.
  • Speed: Income tax returns filed electronically with the IRS are usually handled faster and an acknowledgement is received from them.
  • Tracking: Monitor the status of your submission online with ease.

Avoid stress and heartbreaks associated with delays or penalties for failure to comply with the Electricity Excise Tax with us today. E-file your Electricity Excise tax with us now and ease compliance burden.