Tobacco Excise Tax: A Comprehensive Approach
Tobacco products are burdened with excise taxes in the U.S due to factors such as health regulation as well as revenue collection for the federal Treasury. In case you are part of the industry involved in manufacture, import or trade of tobacco products then there is a possibility that you may be required to pay a Tobacco Excise Tax. This handbook includes some basic information regarding these questions, filing deadlines and how various types of businesses can efficiently fulfil their filing requirements with e-filing services available at our company.
What is the Tobacco Excise Tax?
On a federal level, the government places above and beyond taxes referred to as Tobacco Excise Tax on the tobacco Products manufactured, imported and sold. These would include cigarettes, cigars, snuff, chewing tobacco, pipe tobacco and roll your own tobacco. The excise tax is based on specific products such as the quantity of sold or manufactured goods.
Who has an Obligation to Pay the Tobacco Excise Tax?
Such sectors are normally required to be engaged in filing and making payments for Tobacco Excise Tax: These are organisations involved in filing and paying Tobacco Excise Tax for the manufacturing activities of the required products. Manufacturers of Tobacco Products: If you manufacture tobacco products within the country then excised tax on such goods will be incurred.
- Importers of Tobacco Products: There are companies engaged in the importation of tobacco products in the U.S which are to remit excise tax on the products so imported.
- Tobacco Product Dealers: To be more specific, tobacco product distribution channels such as distributors and wholesalers equally fall in the category of paying the Tobacco Excise Tax.
Company Categories Filing Tobacco Excise Tax
It’s helpful to understand the category your business belongs to as this will help avoid errors in compliance.
- Small Businesses: Tobacco manufacturing and dealing especially for small scale players can be considered as a small business where they are still required to file and pay the excise. However, there are certain limits or exclusions for the taxes.
- Large Scale Manufacturer: Tobacco products manufacturers with larger volume of production or sales forecast are indeed under the duty notification to submit excise tax return as per frequency intervals or reporting as may apply.
- Importers: When introducing excise taxable tobacco products in the US from abroad, it is necessary to observe and remit the appropriate excise tax.
- Wholesalers and Distributors: Tobacco products wholesale supply to retailers also triggered certain compliant obligations in terms of excise tax filing requirements.
Form 720: Federal Excise Tax Return
The Federal Excise Tax form associated with Tobacco excise tax is derived from the Internal Revenue form 720 (Quarterly Federal Excise Tax Return). The excise tax payers are also required to submit form 720 each period in out of every four reporting periods to certify their tax status. This form comprises other items where tax owed on other commodities incurring excise taxes such as transport of ‘air’ and spirit fuels can be mentioned and taxes calculated and paid accordingly.
- Filing Deadlines: Form 720 must be submitted on the last day of the month following the end of any of the quarters within which the tax was charged. For example, the form should be properly filed by the 30th of April for the first quarter ending March, i.e. (January – March).
E-file Your Tobacco Excise Tax with Us
Our e-filing service will help you fill out Form 720 and file it together with pay due taxes in a timely manner. Our platform offers:
- Fast and Easy Filing: E-filing helps considerably save time by completing the Tax on Tobacco Online Forms. There is no completion of any form of documents that are very time consuming.
- Error Checking: This feature assists in accurately and completely submitting the necessary forms thereby minimising the risk of penalties.
- Instant Confirmation: Upon finishing the filing of the form with the IRS, one gets an acknowledgment, confirming that the filing is successful.
Never close the doors of competitive opportunity that comes with e-filing when it matters most. No matter what size your business is, small or large-scale importer, you are within our full e-filing assistance for excise tax compliant and timely submission.