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What Is the Manufacturer’s Excise Tax?

Manufacturer’s excise tax is a federal tax imposed on the sale of certain goods by the manufacturer, producer, or importer. It generally applies when these taxable products are first sold in the United States.
The tax may be calculated as a percentage of the sale price or a fixed rate, depending on the product category. Only specific goods identified under federal excise tax rules are subject to this tax.

Key Points
  • Applies to the first sale of certain manufactured goods.
  • Usually paid by the manufacturer, producer, or importer
 
  • The tax can be based on the sale price or a specific rate.
  • Examples include coal, taxable tires, vaccines, Gas guzzler tax, and other designated products.

Manufacturers Excise Tax Categories Filed
Using Simple720

The following manufacturer excise tax categories are listed under the Manufacturer’s Taxes
section in Form 720 and can be filed through Simple720.

IRS No. 36 Underground Mined – Per Ton

Excise tax imposed on coal produced from underground mines. The tax is calculated based on a per-ton rate for coal sold by the producer.

IRS No. 37 Underground Mined – Sales Price

Excise tax applied to underground-mined coal based on the sale price of the coal, subject to the applicable percentage limit.

IRS No. 38 Surface Mined – Per Ton

Excise tax imposed on coal produced through surface mining. The tax is calculated using a per-ton rate on coal sold by the producer.

IRS No. 39 Surface Mined – Sales Price

Excise tax on surface-mined coal calculated as a percentage of the sales price, subject to the IRS limits for coal excise taxes.

IRS No. 108 Taxable Tires Other Than Bias Ply or Super Single Tires

Excise tax on taxable highway tires other than bias ply or super single tires. The tax generally applies when the tire is sold by the manufacturer, producer, or importer and is calculated based on the tire’s load capacity.

IRS No. 109 Taxable Bias Ply or Super Single Tires (Other Than Super Single Tires Designed for Steering)

Excise tax imposed on bias ply tires or super single tires that are not designed for steering. The tax is applied when the tires are first sold by the manufacturer or importer.

IRS No. 113 Taxable Tires, Super Single Tires Designed for Steering

Excise tax on super single tires specifically designed for steering axles. These tires are reported separately due to their different classification.

IRS No. 40 Gas Guzzler Tax

Excise tax on the sale of certain passenger vehicles that do not meet federal fuel economy standards. Automobile manufacturers or importers must report this tax and attach Form 6197 (Gas Guzzler Tax) when applicable.

IRS No. 97 Taxable Vaccines

Excise tax on the sale of certain vaccines listed under federal law. The tax is generally imposed on the manufacturer or importer and is calculated on a per-dose basis.

Additional Manufacturer Tax Categories
Referenced by the IRS

The following IRS numbers appear in Part II of Form 720 but relate to taxes commonly
referenced under manufacturer-related excise taxes in IRS guidance.

IRS No. 41 Sport Fishing Equipment (Other Than Fishing Rods and Fishing Poles)

Excise tax imposed on certain sport fishing equipment when sold by the manufacturer, producer, or importer. This category generally includes items such as fishing reels, artificial lures, baits, and other sport fishing gear.

IRS No. 44 Bows, Quivers, Broadheads, and Points

Federal excise tax imposed on bows and related archery equipment including quivers, broadheads, and points when sold by manufacturers, producers, or importers.

IRS No. 106 Arrow Shafts

Excise tax imposed on arrow shafts sold by the manufacturer, producer, or importer. The tax applies to shafts intended for use in archery arrows

Common Challenges in Manufacturers Excise Tax Filing

Identifying Taxable Products
Determining whether a product falls under manufacturer’s excise tax categories can be confusing. Businesses must carefully review IRS rules to confirm if their goods are subject to excise tax.
Calculating the Correct Tax Amount
Excise taxes may be based on a percentage of the sale price or a fixed rate, depending on the product. Incorrect calculations can lead to underpayment or overpayment of taxes.
Understanding Exemptions and Special Cases
Certain sales, such as exports or products used for specific purposes, may qualify for exemptions. Identifying and applying these exemptions correctly can be challenging.
Additional Forms for Certain Taxes
Some manufacturer excise taxes require additional forms or documentation when filing. For example, when reporting Gas Guzzler Tax, businesses must attach Form 6197 (Gas Guzzler Tax) along with the required excise tax reporting details to ensure proper compliance with IRS requirements.
Maintaining Accurate Sales Records
Manufacturers must maintain detailed records of product sales, pricing, and transactions. Incomplete or inaccurate records can cause issues during tax reporting or IRS reviews.

Manufacturer Excise Tax Filing:
Manual vs Online Steps

Manual Filing Steps
(Paper Filing)
  • Step 1: Download the latest versions of Form 720 from the official IRS website
  • Step 2: Enter business details such as company name, address, and contact information on both forms.
  • Step 3: Provide your EIN and select the correct tax quarter.
  • Step 4: Identify the correct IRS number tax category for your filing under manufacturer taxes
  • Step 5: Enter taxable quantities manually for each applicable category.
  • Step 6: Refer to Form 720 instructions and manually calculate tax amounts using published rates.
  • Step 7: Perform additional calculations for special categories that require extra data inputs.
  • Step 8: Total all the tax amounts and enter the final Tax amount in part 3
  • Step 9: Complete Form 720-V payment voucher with EIN, quarter, and payment amount.
  • Step 10: Attach Form 720 with payment and mail the complete package to the correct IRS address.
Online Filing Steps With Simple720
  • Step 1: Create your free Simple720 account and log in securely.
  • Step 2: Enter your business information including name, address, EIN, and filing quarter.
  • Step 3: Select the applicable Manufacturer Excise Tax category and subcategory.
  • Step 4: Enter the required quantity in tons and sales price
  • Step 5: Review the auto-calculated tax amount and submit your return with secure payment.
    • File Your Manufacturer Excise Tax Online

Smart Solutions for Manufacturer’s Excise
Tax Filing Challenges

Simple720 simplifies the process of reporting manufacturer’s excise taxes, helping businesses file accurately and stay compliant with IRS requirements.

Single Interface for Special Manufacturer Tax Requirements
Some manufacturer taxes require additional reporting or supporting forms, such as Gas Guzzler Tax reporting with Form 6197. Simple720 provides a single interface that captures all required details and manages these requirements in one place, eliminating the need to handle multiple forms separately.
Clear Listing of Applicable Tax Categories
Manufacturer’s excise taxes apply only to specific IRS-designated product categories. Simple720 lists only the relevant manufacturer tax categories, helping users avoid confusion and select the correct category for reporting.
Automatic Price-Based Tax Calculations
Many manufacturer excise taxes are calculated based on the product’s sale price or a specified tax rate. Once the sales value is entered, Simple720 automatically calculates the tax amount, reducing manual errors.
Structured Entry for Multiple Taxable Products
Manufacturers may sell different taxable product types within the same reporting period. Simple720 allows you to organize and report each product category clearly within the same return.
Detailed Guidance for IRS Manufacturer Tax Sections
The platform guides users through the specific sections required for manufacturer excise tax reporting, ensuring the necessary details are entered correctly before submission.

Simple720 Vs Others

IRS Authorized e-Filer Brand X Brand Y Brand Z
Cloud-Based Yes No No No
Software Download None Yes-PC Only Yes Yes
License None Required Required Required
Annual Contract No Required Required Required
All Excise Taxes Yes Fuel Taxes Only No No
Cost $50/return $1,000+/yr. $1,500+/yr. $5,000+/yr.
Testimonial
Secure Storage and Easy Access
— Michael Carter, Ohio

Secure Storage and Easy Access
Simple720 securely stores all our manufacturer excise tax filings, making it easy to access previous returns whenever we need them for reporting or audits.

— Daniel Brooks, Texas

Simple Navigation for Complex Filings
The platform is very easy to navigate, even when reporting different manufacturer tax categories. It guided us through the process clearly and helped us complete our Form 720 without confusion.

— Rachel Adams, Michigan

Affordable and Transparent Pricing
Simple720 offers straightforward and affordable pricing for filing our manufacturer excise taxes. It helped us stay compliant without spending too much on filing costs.

File Form 720 Online

Frequently Asked Questions

Coal excise tax is imposed on coal produced in the United States and sold by the producer. The tax is calculated either per ton of coal sold or as a percentage of the sales price, depending on whether the coal is surface mined or underground mined.

Certain sales may qualify for exemptions, such as sales to state or local governments or nonprofit educational organizations for their exclusive use. However, these exemptions do not apply to some categories such as coal, gas guzzler vehicles, and vaccines.

The IRS imposes these taxes on specific categories of goods including sport fishing equipment, bows and archery components, arrow shafts, coal, gas guzzler vehicles, and certain vaccines. These categories are defined under federal excise tax rules and are reported using Form 720.

Depending on the product category, the tax may be calculated as a percentage of the product’s sale price or a fixed amount per unit. For example, some equipment taxes are based on the sale price, while other items such as arrow shafts may be taxed per unit.

Yes. An importer who brings taxable equipment into the United States may be responsible for the excise tax if they are treated as the manufacturer for tax purposes. In some cases, even individuals importing equipment directly from foreign sellers can become liable for the tax.

Interested in learning how Manufacturer’s Excise Tax filing works on Simple720? Our excise tax experts are ready to guide you through the complete process.

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