The federal government imposes an excise tax on what it terms “taxable fuel.”Taxable fuel means gasoline, diesel fuel and kerosene.The tax is imposed when the fuel leaves the bulk transfer/terminal system and is loaded over a rack.The rate of tax on gasoline is 18.3 cents per gallon.The rate of tax on aviation gasoline is 19.3 cents per gallon.The rate of tax on diesel fuel and kerosene is 24.3 cents per gallon.In addition to the basic excise tax an additional 0.1 cents per gallon Leaking Underground Storage Tank (LUST) tax is added in most cases.The person responsible for the tax must file a quarterly excise tax return on a Form 720 and remit the tax to the government.
In order to enforce the excise tax on taxable fuels many businesses involved in the fuel business are required to be registered with the Internal Revenue Service.This registration is done using a Form 637.For information on the types of businesses required to be registered please click here.
The Internal Revenue Service has created requirements for reporting movements of taxable fuel.This system is known as the Excise Summary Terminal Activity Reporting System or ExSTARS.Terminal operators and bulk fuel carriers (pipeline, vessel and barge operators) are required to file monthly information returns.For more information on ExSTARS reporting requirements please click here.
The Internal Revenue Code imposes penalties for violations of many of the statutes involving taxable fuels.For information on these penalties please click here.