Excise Taxes (Including Fuel Tax Credits and Refunds)
## Future Developments & Reminders
- Biodiesel, Renewable Diesel, and SAF Credits: The credits for biodiesel, renewable diesel, agri-biodiesel mixtures, alternative fuels, and sustainable aviation fuel (SAF) expire for fuels sold or used after 2024.
- Gas Guzzler Tax: The gas guzzler tax applies to corporate stock repurchases after December 31, 2022.
- Inflation Adjustments: Various taxes have been adjusted for inflation in 2025, including air transportation, arrow shafts, and international air travel facilities.
- Export Tax on Crude Oil: Due to IRS acquiescence in a court case, the export tax on crude oil is currently not applicable.
- Environmental Taxes Reinstated: The Infrastructure Investment and Jobs Act reinstated taxes on chemicals (other than ODCs) and imported chemical substances that previously expired in 1995.
## Introduction
This publication provides detailed guidance on various excise taxes, including fuel taxes, environmental taxes, communications taxes, and manufacturer taxes. It covers tax credits, refunds, and obligations not in registered form, with sections dedicated to specific topics like fuel types, alternative fuels, and special cases.
## Excise Taxes Not Covered
This publication does not cover:
- Corporate income tax
- Estate and gift tax
- Self-employment tax
- Payroll taxes
- Sales and use tax
- State and local taxes
## Chapter 1: Fuel Taxes
### Definitions
- Gasoline: Includes all motor vehicle fuel, except aviation gasoline.
- Aviation Gasoline: Refers to fuel used in aircraft engines designed for flight.
- Diesel Fuel and Kerosene: Includes fuels used as propulsion or heating fuels in locomotives, marine engines, and other internal combustion engines.
- Other Fuels: Covers alternative fuels, compressed natural gas (CNG), fuels used on inland waterways, and second-generation biofuels not used as fuel.
### Information Returns
- Fuel tax information returns are generally due the 30th day after the close of the month in which the taxes are incurred.
### Registration Requirements
- Registrants must file Form 720, Quarterly Excise Tax Return, to report and pay excise taxes on fuel sold or used in the United States.
### Gasoline and Aviation Gasoline
- Tax Rate: The tax rate for gasoline is $0.183 per gallon, and for aviation gasoline, it's $0.247 per gallon (as of 2025).
- Undyed Fuel: Undyed gasoline and aviation gasoline are exempt from the fuel excise tax.
### Diesel Fuel and Kerosene
- Tax Rates:
- Undyed diesel fuel: $0.146 per gallon
- Undyed kerosene (other than for aviation): $0.146 per gallon
- Kerosene for use in aviation: $0.247 per gallon
### Diesel-Water Fuel Emulsion
- Subject to a special tax rate of $0.045 per gallon.
### Kerosene for Use in Aviation
- Same tax rate as aviation gasoline, $0.247 per gallon.
### Surtax on Any Liquid Used in a Fractional Ownership Program Aircraft as Fuel
- Applies at the same rates as aviation gasoline.
### Certificate for Commercial Aviation or Nontaxable Uses
- Required for certain fuel used in commercial aviation or for nontaxable uses, such as race cars and historical vehicles.
### Other Fuels (Including Alternative Fuels)
- CNG: Subject to a $0.542 per million Btu tax.
- Inland Waterways: Fuels used on inland waterways are taxed at rates specific to each fuel type.
- Second-Generation Biofuel Not Used as Fuel: Exempt from excise tax.
- Biodiesel Sold as But Not Used as Fuel: Subject to a $0.247 per gallon tax.
## Chapter 2: Fuel Tax Credits and Refunds
### Gasoline and Aviation Gasoline
- Undyed Diesel Fuel Credit: Allowable for undyed diesel fuel used in on-highway motor vehicles.
- Refunds of Second Tax: Possible if the same fuel is taxed twice, such as when both excise tax and state sales tax are collected.
### Diesel Fuel and Kerosene
- Undyed Kerosene Credit: Available for undyed kerosene used in heating or lighting purposes.
### Other Fuels
- Credits and refunds vary based on the specific fuel type and its use.
## Chapter 3: Environmental Taxes
### Tax on Petroleum
- Applies to petroleum (crude oil, natural gas liquid, and refined oils) extracted from U.S. soil or waters or imported into the United States.
- Rate: The rate varies depending on the type of petroleum.
### Tax on Chemicals (Other Than ODCs) and on Imported Chemical Substances
- Imposes a tax on chemicals (other than ODCs) and imported chemical substances.
- Rate: Varies based on the substance's chemical abstract service (CAS) number.
### Ozone-Depleting Chemicals (ODCs)
- Subject to a separate tax under the Clean Air Act.
## Chapter 4: Communications and Air Transportation Taxes
### Uncollected Tax Report
- Required for certain communications services providers.
### Communications Tax
- Imposes a tax on telecommunications services, including telephone, radio, television, and data transmission services.
### Air Transportation Taxes
- Includes taxes on air transportation of persons and property, with rates varying based on the type of flight and aircraft.
## Chapter 5: Manufacturers Taxes
### Taxable Event
- Manufacturing, producing, or storing taxable articles within the United States.
### Exemptions
- Various exemptions apply to specific industries, such as sport fishing equipment, coal, and tires.
### Sport Fishing Equipment, Bows, Quivers, Broadheads, and Points
- Generally exempt from excise tax.
### Coal
- Subject to a $0.176 per ton tax.
### Taxable Tires
- Motor Vehicle Tires: Subject to a $2.54 per tire tax.
- Off-Road Tires: taxed at different rates based on their size and intended use.
### Gas Guzzler Tax
- Applies to corporate stock repurchases after December 31, 2022.
### Vaccines
- Exempt from excise tax under section 410(d).
## Chapters 6-19: Additional Tax Topics
These chapters cover a range of specific taxes and obligations, including retail taxes on heavy trucks, trailers, and tractors; ship passenger tax; foreign insurance taxes; obligations not in registered form; indoor tanning services tax; patient-centered outcomes research fee; repurchase of corporate stock; filing Form 720; payment procedures; examination and appeal processes; rulings program; and getting tax help.
## Conclusion
This publication provides a comprehensive overview of excise taxes, credits, refunds, and related matters. For the latest updates and detailed instructions, refer to IRS resources or seek professional advice.
