Manfacturer Excise Tax: Key Highlights
The Manufacturer Excise Tax is a specific tax which relates to the Federal and even the state governments levied taxes for products that are produced or manufactured in the country. The intention of these taxes is to control how some products are manufactured and sold and also help in earning revenue for the government. Therefore if your company markets any manufacturing goods that attract taxes, then proper filing and knowledge of this tax is important for the sake of compliance.
As much as this notice only attempts to provide an introduction and background to the Manufacturer Excise Tax, contain who is required to submit a tax return, what types exist and file certain form 720 to comply with IRS regulations.
What Is the Manufacturer Excise Tax?
In general, the Manufacturer Excise Tax covers all products that are manufactured in the United States and are therefore subject to federal excise tax on those products. Such taxes are paid periodically on several varieties which includes, but is not limited to, cars and trucks, tires, and some class of fuels. The ranges of taxes charged and the rule also differs with the range of products under the category.
Key Features of Manufacturer Excise Tax:
- Taxable Products: Makes a specific provision on the managed gas and oils which permit taxation crossing over the board, such products as ceramics, flocculants, fabrics, glass, metallic paints and varnishes, plastic and rubber products and cements among other comprehensive provision groups.
- Tax Rates: The rates will differ from one product to the next with some items having their specific tax ratings while others may be subjected to the general tax.
- Purpose: Oversees, and collects control from the activities and sales of certain goods that the company has manufactured.
Who Needs to File the Manufacturer Excise Tax?
Businesses operated to make or manufacture a taxable item are liable to pay the excise tax; hence the need to file the Manufacturer Excise Tax. This incorporate manufacturers, producers and even importers of goods that fall under hazardous excise taxes by the federal government.
Entities Required to File:
- Manufacturers: They are companies engaged in the production of goods liable for an excise tax, for example, cars, tires, some types of fuels and others.
- Producers: Organisations which manufacture or assemble goods for the market and apply excise taxes on these goods.
- Importers: Organisations that bring dutiable goods to the US and pay the duty on such goods.
Manufacturer Excise Tax Filing Categories
The requirements of the Manufacturer Excise Tax filing largely depend on the classification of the particulars which are being manufactured and exported. It is vital to know your category for proper and timely reporting compliance.
- Motor Vehicles Manufacturers producing motor vehicles are required to file excise tax according to the structure and weight of the said motor vehicles. Muscular cars, light trucks, and scooters fall under this group.
- Tires A levy is imposed on both new as well as used (replacement) tires. A tire excise tax applies to new tires and replacement tires. Reporting and payment of the tax is the responsibility of the manufacturers and the importers.
- Fuels Certain fuels such as gasoline and diesel are also subject to excise duties. This includes taxes for fuels such as petrol and diesel who are manufacturers or importers of these products.
- Other Taxable Goods Additional taxable goods may be implemented that include some degree of luxury products or any other kinds of products that fall under the categories set out by IRS taxation laws. How many percent do taxable businesses owe to the IRS? It varies depending on the category of the business and the IRS has issued standards that need to be followed by businesses.
Filing Manufacturer Excise Taxes with Form 720
In order to observe regulations of the Manufacturer Excise Tax, first, you are required to complete Form 720 (Quarterly Federal Excise Tax Return) with the IRS. An Internal Revenue Service form to be used by taxpayers for reporting a variety of federal excise taxes as may be applicable to manufactured products.
Key Sections of Form 720 for Manufacturer Excise Tax:
- Part I -: Provide total amount of excise tax applicable to manufactured products including vehicles, tires, fuels among others.
- Schedule A: In this section, those amounts should be broken down and tax due should be computed at the rates that apply for the products.
How and When to File Form 720:
Submit quarterly Form 720. The due dates for submission are as follows:
- First quarter: 30 April
- Second quarter: 31 July
- Third quarter: 31 October
- Fourth quarter: 31 January
How to Fill Out and Submit Form 720:
- Gather Product Information: Identify all products that were manufactured and or imported and which attract excise taxes.
- Statutory filing Form 720: The Excise tax amount for each category of taxable goods is assessed: ** Make excise tax payment against every category prone to excise tax.
- File Form along with Payments: Submit Form 720 to the internal revenue services alongside the tax payment mode chosen either electronically or via post.
E-File Your Manufacturer Excise Taxes with Us
The Issuance of Manufacturer Excise Taxes may require work and this is made easy on the e-filing platform. You have to e-file Form 720 when making your returns with us in order to facilitate timely and correct submission of the returns without straining on the complicated processes.
The Advantages of E-filing Forms 720:
- Reduced TAT for Communication & Processing: E-filing increases the speed within which IRS accepts and processes the returns.
- Minimised Mistakes: There are measures incorporated in submission to reduce mistakes.
- Ease of Filing: It doesn't matter where you are or in what time zone you are in as you can do Form 720 filing in our online secured instrument.
- Confidentiality: Your data is protected by high-level encryption technology.
E-Filing Instructions:
- Create an Account: Users must register on the platform to start the process of e-filing their Manufacturer Excise Taxes.
- Complete the Form: Take advantage of our constant follow up to ensure that Form 720 is completed correctly.
- Submit and Confirm: Among the several methods available, you will choose the electronic return and for that, you will get an immediate acknowledgement from the IRS.
- Strategies to Reduce the Risk of Penalties: In Compliance With the Law
It is very vital to pay taxes, the Manufacturer Excise Taxes within the period to avoid imposts on penalties. Failure to submit tax returns within the designated period can expose organisations to heavy penalties hence the need to report accurately and within the time frame.
Adverse Actions Expected Include Penalties:
- Late Filing Penalty: For taxpayers who fail to file Form 720 on time, penalties may be assessed of up to 25% of the unpaid tax amount.
- Late Payment Penalty: A penalty of 0.5% of any unpaid tax is applicable on every month that the amount of tax remains unpaid.
- Interest: It will be levied on any remaining tax liabilities until all have been paid.
The manufacturer excise tax can be a necessary compliance burden for businesses which are in the production or importation of taxable goods. Timely and accurate filing of Form 720 obligations helps you stay compliant with tax regulations and lowers the risk of incidences of penalties. Make it easier for yourself by e-filing with us, whoever has this facility, it is quite simple and quick to manage Manufacturer Excise taxes online.