How to File Federal Excise Tax on Trucks Using Form 720

Buying or selling certain heavy trucks, truck trailers, semitrailers, and highway tractors can involve a federal excise tax that businesses need to understand before completing a transaction. For eligible vehicles, the federal excise tax on trucks is generally imposed on the first retail sale and is reported by the responsible seller using Form 720.

The tax is different from the Heavy Highway Vehicle Use Tax reported on Form 2290. Understanding this distinction is essential because the two taxes apply at different stages and have different filing requirements.

In this guide, we explain how the federal truck excise tax works, who is responsible for it, how to calculate it, and how it is reported using Form 720.

What Is the Federal Excise Tax on Trucks?

The federal excise tax on trucks is a federal retail excise tax imposed on certain truck chassis and bodies, truck trailer and semitrailer chassis and bodies, and certain highway tractors.

Under the current IRS rules, the tax rate is 12% of the sales price for the first retail sale of a taxable article. On Form 720, this tax is identified as IRS No. 33. I

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The tax generally applies to:

• Truck chassis and bodies
• Trailer and semitrailer chassis and bodies
• Tractors primarily designed for highway transportation in combination with a trailer or semitrailer

The seller is generally responsible for the tax on the first retail sale. I

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This tax should not be confused with the separate federal highway use tax imposed on certain heavy vehicles.

Federal Excise Tax on Trucks vs. Form 2290

One of the most common sources of confusion is the difference between Form 720 and Form 2290.

Form 720 is used to report the federal retail excise tax on certain trucks, trailers, semitrailers, and tractors.

Form 2290 is used for the Heavy Highway Vehicle Use Tax on certain highway motor vehicles with a taxable gross weight of 55,000 pounds or more. I

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The taxes are triggered by different events:

• Form 720 generally concerns the first retail sale of certain taxable vehicles.
• Form 2290 concerns the use of qualifying heavy highway vehicles on public highways.

A business can potentially encounter both taxes, depending on the transaction and how the vehicle is used.

Which Trucks Are Subject to the Federal Excise Tax?

Not every truck is subject to the 12% federal retail excise tax.

The IRS provides specific exclusions based on the vehicle's characteristics and gross vehicle weight.

For example, the retail tax generally does not apply to truck chassis and bodies suitable for use with a vehicle having a gross vehicle weight of 33,000 pounds or less.

For truck trailers and semitrailers, the tax generally does not apply when the chassis or body is suitable for use with a trailer or semitrailer having a gross vehicle weight of 26,000 pounds or less.

Certain tractors are also excluded when they meet the applicable gross vehicle weight and gross combined weight limits. I

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Because vehicle classification can depend on the specific design and intended use, businesses should review the IRS rules before determining that a vehicle is taxable.

How Much Is the Federal Excise Tax on Trucks?

For taxable articles covered by IRS No. 33, the federal retail excise tax is generally 12% of the applicable sales price. I

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For a simple example, suppose a taxable truck has an applicable sales price of $100,000.

The calculation would be:

$100,000 × 12% = $12,000 federal excise tax

The actual tax base can be more complicated in certain transactions. IRS rules include specific provisions concerning the sales price, related persons, constructive sales prices, and presumptive retail markups.

For certain manufacturer, producer, importer, or related-person transactions involving trucks and truck tractors, the IRS identifies a 4% presumed markup percentage for determining the tax base. Different rules apply to certain trailers, semitrailers, and remanufactured trucks and tractors. I

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Therefore, businesses should not automatically calculate every transaction by simply multiplying the invoice price by 12%.

Who Pays the Federal Excise Tax on Trucks?

For a taxable first retail sale, the seller is generally liable for the federal excise tax.

The first retail sale is an important concept under the federal excise tax rules. A sale may not be treated as the first taxable retail sale if there has already been a prior taxable sale, lease, or use of the article, subject to the applicable exceptions.

There are also rules for sales where the purchaser intends to resell or lease the article on a long-term basis. In certain circumstances, a properly executed resale certificate can affect whether the sale is treated as taxable. I

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Because these rules can affect who is responsible for the tax, sellers should establish the tax status of the transaction before completing the sale.

How to File Federal Excise Tax on Trucks Using Form 720

Once a business determines that it is responsible for the tax, the next step is reporting it correctly.

Step 1: Determine Whether the Sale Is Taxable

Start by identifying the vehicle and determining whether it falls within the IRS definition of a taxable truck, trailer, semitrailer, or tractor.

Check applicable exclusions, including gross vehicle weight thresholds and specific exempt vehicle categories.

Step 2: Determine the Applicable Sales Price

Calculate the appropriate tax base under the federal excise tax rules.

The sales price can involve more than the basic amount shown on an invoice in certain transactions. Special rules may apply to related-party transactions, manufacturer sales, and other arrangements.

Step 3: Calculate the Tax

For a taxable first retail sale covered by IRS No. 33, the general rate is 12%.

For example:

Taxable sales price: $150,000

Federal excise tax: $150,000 × 12% = $18,000

Keep documentation supporting the calculation with your tax records.

Step 4: Complete Form 720

Form 720 is the Quarterly Federal Excise Tax Return.

The current Form 720 identifies the retail tax on truck, trailer, and semitrailer chassis and bodies, and tractors as IRS No. 33, with a rate of 12% of the sales price. I

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Enter the applicable amount in the appropriate section of the return and complete the remaining required portions of Form 720.

Step 5: Review the Return

Before submitting the return, check:

• Business name
• EIN
• Reporting quarter
• Taxable sales
• Sales price
• Tax calculation
• IRS tax number
• Required schedules
• Payment information

A review can help identify simple errors before transmission.

Step 6: Submit Form 720

Form 720 can be filed electronically through the IRS excise tax e-file program. The IRS provides information about electronic filing providers for Form 720. I

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Businesses using an online service such as QuickFile720 should confirm that the service supports the applicable Form 720 filing before submitting.

When Is Form 720 Due?

Form 720 is generally filed quarterly.

The standard filing schedule is:

QuarterPeriod CoveredGeneral Due DateQ1January–MarchApril 30Q2April–JuneJuly 31Q3July–SeptemberOctober 31Q4October–DecemberJanuary 31

The IRS instructions state that Form 720 is generally filed for each calendar quarter until a final return is filed. I

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If a deadline falls on a Saturday, Sunday, or legal holiday, the IRS generally allows the return to be filed on the next business day.

Are Any Trucks Exempt From Federal Excise Tax?

Yes. Federal law provides several exclusions and exemptions.

The IRS identifies certain vehicles and transactions that are not subject to the retail tax. Examples include certain lower-weight truck chassis and bodies, qualifying rail trailers and rail vans, certain ambulances and hearses, and truck tractors specifically designed for shifting semitrailers around freight yards and terminals. Certain sales to government and qualifying organizations may also qualify for an exemption. I

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The tax treatment depends on the exact vehicle and transaction, so businesses should review the applicable IRS requirements before treating a sale as exempt.

What About Truck Parts and Accessories?

The federal excise tax can also apply to certain parts and accessories sold in connection with taxable trucks, trailers, semitrailers, and tractors.

The IRS has specific rules for parts and accessories that are sold with a taxable article or installed after the vehicle is placed in service.

For example, certain separately purchased parts and accessories can become taxable when their total cost, including installation charges, exceeds the applicable threshold during the specified six-month period. Replacement parts and certain specified items may receive different treatment. I

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Because these rules can be detailed, businesses should maintain records for parts, accessories, installation charges, and dates.

Common Federal Truck Excise Tax Mistakes

Confusing Form 720 With Form 2290

Form 720 and Form 2290 address different federal excise taxes. Make sure you identify the correct tax before filing.

Assuming Every Heavy Truck Is Taxable

Vehicle weight alone does not determine whether the 12% retail tax applies. The type of vehicle, its design, intended use, and applicable exclusions all matter.

Using the Wrong Sales Price

Certain transactions require special rules for determining the tax base.

Missing the First Retail Sale Rules

The tax generally applies to the first retail sale, subject to specific exceptions. Businesses should determine whether an earlier taxable sale or qualifying transaction affects the tax treatment.

Forgetting About Related Parts and Accessories

Parts and accessories sold with or installed on taxable vehicles can have separate tax implications.

Frequently Asked Questions

What is the federal excise tax on trucks?

The federal excise tax on trucks is generally a 12% retail excise tax on the first retail sale of certain truck chassis and bodies, trailer and semitrailer chassis and bodies, and qualifying highway tractors. The tax is reported under IRS No. 33 on Form 720. I

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Is the federal truck excise tax 12%?

For taxable articles covered by IRS No. 33, the rate is currently 12% of the sales price. Special rules may affect how the taxable sales price is determined. I

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Who is responsible for truck excise tax?

The seller is generally responsible for the tax on the first taxable retail sale of the applicable truck, trailer, semitrailer, or tractor. I

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Is truck excise tax filed on Form 720?

Yes. The federal retail tax on qualifying trucks, trailers, semitrailers, and tractors is reported on Form 720 under IRS No. 33. I

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Is Form 720 the same as Form 2290?

No. Form 720 is used for the quarterly reporting of various federal excise taxes, including the retail tax on certain trucks and trailers. Form 2290 is used for the Heavy Highway Vehicle Use Tax on qualifying highway vehicles with a taxable gross weight of 55,000 pounds or more. I

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Can Form 720 be filed electronically?

Yes. The IRS provides an electronic filing program for Form 720 through participating providers. Businesses should verify that their chosen provider supports the applicable return and filing requirements. I

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Final Thoughts

Understanding the federal excise tax on trucks is important for manufacturers, dealers, importers, and other businesses involved in taxable vehicle sales.

The current federal retail tax for qualifying truck, trailer, semitrailer, and tractor sales is generally 12% of the sales price and is reported under IRS No. 33 on Form 720. However, not every truck is subject to this tax, and specific exclusions, exemptions, and sales-price rules can affect the calculation. I

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It is also important to keep Form 720 separate from Form 2290. The former addresses various federal excise taxes, including the retail tax on certain heavy vehicles, while Form 2290 covers the Heavy Highway Vehicle Use Tax.

For businesses that prefer electronic filing, QuickFile720 can be considered as an online filing option where the applicable Form 720 service is supported. Always review the latest IRS instructions before filing to ensure that your vehicle, transaction, tax calculation, and filing method meet current requirements.