Form 720 Part I vs. Part II
Form 720 Part I and Part II are two lists of excise taxes, and which list your tax is on decides how and when you pay. The short version: Part I generally means semimonthly deposits and Schedule A. Part II generally means you pay when you file, with no Schedule A. The two parts come together in Part III, where line 3 adds them into your total tax.
The placement doesn't follow an obvious theme. Tires are in Part I while fishing tackle is in Part II, even though both are taxes on manufacturers' sales. So look up your tax rather than guessing by category.
What sits in Form 720 Part I and Part II
This table follows the order on the June 2026 form.
| Part | Group | IRS Nos. |
|---|---|---|
| Part I | Environmental taxes (attach Form 6627) | 53, 16, 54, 17, 98, 19 |
| Part I | Communications and air transportation | 22, 26, 28, 27 |
| Part I | Fuel taxes | 60, 104, 105, 107, 119, 35, 69, 77, 111, 79, 62, 13, 14, 112, 118, 120, 121, 122, 123, 124 |
| Part I | Retail tax on trucks, trailers, and tractors | 33 |
| Part I | Ship passenger tax | 29 |
| Part I | Obligations not in registered form, and remittance transfers | 31, 155 |
| Part I | Foreign insurance taxes | 30 |
| Part I | Coal, tires, gas guzzlers, and vaccines | 36 to 39, 108, 109, 113, 40, 97 |
| Part II | PCORI fee | 133 |
| Part II | Sport fishing equipment | 41, 110, 42, 114 |
| Part II | Bows, quivers, broadheads, points, and arrow shafts | 44, 106 |
| Part II | Indoor tanning services | 140 |
| Part II | Inland waterways fuel use and related LUST tax | 64, 125 |
| Part II | Section 40 fuels and biodiesel sold as but not used as fuel | 51, 117 |
| Part II | Floor stocks tax on ozone-depleting chemicals (attach Form 6627) | 20 |
| Part II | Repurchase of corporate stock (attach Form 7208) | 150 |
| Part II | Sales of designated drugs | 142 |
If you are not sure a tax applies to you at all, start with the filing check, then come back to this table.
The three things the placement changes
| Question | Part I | Part II |
|---|---|---|
| Semimonthly deposits? | Generally yes, unless net Part I liability is $2,500 or less for the quarter | No, except the floor stocks tax, which generally needs a single deposit |
| When is the tax paid? | Through deposits, with any remainder paid with the return | With the return |
| Schedule A? | Yes, if you have Part I liability, even under $2,500 | Never |
The $2,500 test looks only at Part I. This surprises filers with a large Part II number. It also creates one easy mistake: the "no deposit" answer for a small Part I amount doesn't remove Schedule A. The instructions say to complete it even if your net liability is under $2,500.
Two worked examples of a mixed return
Both businesses below are made up.
Example 1: small Part I, large Part II. A company owes $1,800 of tire tax (Part I) and $9,000 of sport fishing tax (Part II).
- Part I net liability is $1,800, which doesn't exceed $2,500, so no deposits are required.
- Schedule A is still needed, and it shows only the $1,800 by semimonthly period.
- Line 3 is $10,800. The company pays the balance with the return.
Example 2: over the line. The same company has $6,000 of tire tax, split evenly at $1,000 for each of the six semimonthly periods, and the same $9,000 in Part II.
- Part I net liability is over $2,500, so deposits are generally required.
- Each semimonthly deposit must generally be at least 95% of that period's net liability, so at least $950. Depositing the full $1,000 each time gives $6,000 on line 5.
- Line 3 is $15,000, and line 10 is $9,000. That is the Part II tax, paid with the return.
Part II didn't change between the two examples, and it never affected the deposit test. Only the Part I number moved the company across the line.
Exceptions that break the pattern
- Floor stocks tax (IRS No. 20). It sits in Part II but generally requires a single deposit. The instructions say the payment is due by June 30, and the tax is reported on the return due by July 31.
- Gas guzzler on a one-time filing (IRS No. 40). It sits in Part I, but a one-time filing needs no deposit and no Schedule A.
- PCORI fee (IRS No. 133). It is reported once a year on the second-quarter return. Filers who report only this fee don't file in the other quarters. See our PCORI fee guide.
- Stock repurchase tax (IRS No. 150). It is reported once a year, on the return for the first full quarter after your tax year closes, with Form 7208 attached.
- Communications and air taxes (IRS Nos. 22, 26, 27, 28). Part I has two deposit methods. These taxes can use the alternative method, based on amounts billed or tickets sold, and they go on Schedule A line 2 instead of line 1.
Reporting both parts online
If your business has taxes on both sides, you enter them once and the totals follow. With EasyFile720, you file Form 720 online across Part I and Part II categories, plus Schedules A, C, and T. Rates for the return are built in and the math is calculated after you enter your figures. Validations catch common mistakes before you submit. The Schedule A figures and any deposit decisions still come from your own records, so have your semimonthly numbers ready if you report Part I taxes.
You can create an account for free and pay when you file, at $39.95 per filing. For how a full return comes together, see the Form 720 overview. When your figures are ready, the online filing page shows how to start.
FAQ
Is the PCORI fee in Part I or Part II?▼
Part II, as IRS No. 133. Deposits are not required for it, and it is reported on the second-quarter return only.
Is the remittance transfer tax in Part I?▼
Yes. IRS No. 155 is listed in Part I, and the instructions say remittance transfer providers make semimonthly deposits and file quarterly returns.
Can I claim Schedule C credits against either part?▼
The instructions say that if you report a liability in Part I or II, you may be eligible to use Schedule C. Do not use it if you are not reporting a liability in either part.
Does Schedule A ever include Part II taxes?▼
No. The form says not to complete Schedule A for Part II taxes.
File Form 720 online
Create a free account with no credit card and build your return. You pay $39.95 only when you file. EasyFile720 is an IRS-authorized e-file provider, and you get an acknowledgment when the IRS accepts your return.
Sources: Form 720 (Rev. June 2026); Instructions for Form 720 (Rev. June 2026); Pub. 510 (Rev. December 2025). General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
