Excise taxes are taxes paid when purchases are made on particular items. Excise taxes are often included in the price of the item. You may also pay excise taxes on certain activities, such as highway usage, telephone service or gambling.
Most of the time excise taxes are figured as part of the price of the commodity or service. Unlike sales tax, the excise tax isn’t listed separately.
Business owners or product or service vendors are responsible for collecting the excise tax and turning it over to the government.
If you run a business that’s required to collect an excise tax, you collect the tax and pay the tax to the government each quarter. You’ll file Form 720, Quarterly Federal Excise Tax Return. Form 720 lists the various types of excise taxes in effect, including the following:
- Environmental taxes
- Communications and air transportation taxes
- Fuel taxes
- Tax on the first retail sale of heavy trucks, trailers, and tractors
- Manufacturers' taxes on the sale or use of a variety of different articles
There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return.
If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering. Use Form 730.
For more information on excise taxes, see Publication 510.
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