Who Files Fuel Excise Tax on Form 720
A gallon of gasoline moves through several hands, but federal fuel tax is generally charged at one point, and whoever is responsible at that point owes it. So the fuel excise tax on Form 720 is filed by the person the rules name for that event. Most often that is the position holder at the terminal rack. It isn't automatically the terminal itself, and it isn't the driver at the pump.
The definitions below come from Publication 510. They matter because many fuel businesses fill more than one role in a single quarter.
Who is liable at each taxable event?
Publication 510 uses the same basic structure for gasoline, and for diesel fuel and kerosene:
| Taxable event | Who is liable | Good to know |
|---|---|---|
| Removal at a terminal rack | Position holder | In a two-party exchange, the receiving person instead |
| Removal from a refinery, either at the rack or by bulk transfer with an unregistered party | Refiner | A narrow exception covers certain rack removals to a registrant's facility |
| Entry into the United States, not by bulk transfer, or by bulk transfer with an unregistered party | Enterer | The importer of record can be jointly liable |
| Bulk removal from a terminal with an unregistered position holder, or pipeline or vessel operator | Position holder | The terminal operator is jointly and severally liable if it isn't the position holder |
| Bulk transfer not received at an approved terminal or refinery | Owner when the fuel leaves the pipeline or vessel | Can shift to the receiving facility operator if the owner meets the conditions |
| Sale within the system to an unregistered person, if not already taxed | Seller | Shifts to the buyer if the seller meets the conditions |
| Removal or sale of blended fuel | Blender | Taxed on the gallons not previously taxed |
What each fuel role means
- Position holder. The person holding the inventory position in fuel at a terminal, as shown in the terminal operator's records. You hold it when you have a contract with the operator for storage and terminaling services for the fuel.
- Terminal operator. Any person that owns, operates, or otherwise controls a terminal. A terminal operator that owns fuel in its own terminal is also a position holder.
- Refiner. Any person that owns, operates, or otherwise controls a refinery.
- Enterer. The importer of record under customs law. If the importer of record is an agent, such as a customs broker, the person the agent is acting for is the enterer. If there is no importer of record, it is the owner at the time of entry.
- Blender. The person that produces blended taxable fuel, meaning fuel made outside the bulk transfer/terminal system by mixing taxed fuel with a liquid on which tax hasn't been imposed.
The bulk transfer/terminal system is the network of refineries, pipelines, vessels, and terminals. Fuel in a truck, tank car, railcar, or an engine's supply tank is outside it.
Do terminal operators file fuel excise tax on Form 720?
This is the most common mix-up. Running a terminal doesn't by itself make you the taxpayer for the fuel other people store there. Your regular filing is Form 720-TO, an information return due the last day of the month after the transaction, with a separate form for each approved terminal.
Publication 510 describes three situations where a terminal operator has this tax liability:
- You own the fuel. You are then a position holder.
- A position holder isn't registered. You are jointly and severally liable if the position holder is someone other than you and isn't a registrant.
- Your paperwork says fuel is dyed. For diesel fuel or kerosene, you are jointly and severally liable if you give anyone a bill of lading, shipping paper, or similar document indicating the fuel is dyed. See the dyed fuel rules in Publication 510.
You avoid the shared liability for an unregistered position holder if, at the time of the removal, you are a registrant, hold an unexpired notification certificate from the position holder, and you have no reason to believe it is false. Keep those certificates current. A notification certificate is the document that tells a person about a registrant's registration status.
Importers and blenders: two easy ones to miss
Importers. Liability sits with the enterer. If you are the importer of record but not the enterer, and the enterer isn't a taxable fuel registrant, you are jointly and severally liable. You avoid that with an unexpired notification certificate from the enterer, provided you have no reason to doubt it.
Blenders. Anyone mixing outside the terminal system can become a filer. Publication 510 specifically says that persons who blend alcohol with gasoline outside the bulk transfer/terminal system must pay the gasoline tax on the alcohol's volume, and those who blend biodiesel with undyed diesel must pay the diesel tax on the biodiesel's volume. They must also be registered as blenders. An alcohol blender reports those gallons on line 62(b), and a biodiesel blender on line 60(c).
For example, using made-up figures, a blender who adds 5,000 gallons of biodiesel to taxed diesel in a quarter reports 5,000 x $.244 = $1,220.
What about other fuels and retail sellers?
Other fuels work differently. IRS No. 79 tax applies on delivery into the fuel supply tank of a motor vehicle or motorboat, or on certain bulk sales. If the delivery is connected to a sale, the seller is liable. If it isn't, the operator of the vehicle or boat is liable.
A business that only buys fuel already taxed and resells it, without blending, isn't described in the gasoline and diesel events above. Check first whether tax really was imposed earlier, and whether you do any blending. Publication 510 also has rules on fuels such as those for fractional aircraft and inland waterways, so a specialized operator should read those sections too.
Registration and where the tax goes on the return
Publication 510 requires registration for blenders, enterers, pipeline operators, position holders, refiners, terminal operators, and vessel operators, among others. Registration goes through Form 637.
| Fuel | IRS No. | Terminal rack line | Other events line | Rate per gallon |
|---|---|---|---|---|
| Gasoline | 62 | 62(a) | 62(b) | $.184 |
| Diesel | 60 | 60(a) | 60(b) | $.244 |
| Kerosene | 35 | 35(a) | 35(b) | $.244 |
Here is the rack case, again with made-up figures. A distributor holds the inventory position and removes 400,000 gallons of gasoline and 200,000 gallons of diesel at a terminal rack in one quarter. It owes 400,000 x $.184 = $73,600 on line 62(a) and 200,000 x $.244 = $48,800 on line 60(a), for a total of $122,400 in Part I. Semimonthly deposits and Schedule A follow, since the amount is over $2,500. Use the fuel excise tax calculator for your own gallons, and see the 2026 fuel rates for the wider list. Two-party exchanges also need Schedule T.
Next step if you are the one liable
Sort your gallons by fuel and by whether each removal happened at the rack. EasyFile720 then guides you through fuel excise tax filing on Form 720, with Part I rates built in, plus Schedules A, C, and T. Validations catch common mistakes before you submit. Whether you are the position holder or another liable party is something you determine first, using the table above. Starting a Form 720 online is free, and you pay $39.95 when you file.
FAQ
Does a gas station file Form 720 for the fuel it sells?▼
Not simply for reselling fuel that was already taxed earlier in the chain, because that isn't one of the taxable events described for gasoline and diesel. A station could still have a duty if it blends fuel, delivers other fuels into vehicle tanks, or has another Form 720 tax.
Is Form 720-TO the same as Form 720?▼
No. Form 720-TO is a monthly information return that terminal operators use to report receipts and disbursements of liquid products. Form 720 is the quarterly return that reports and pays excise tax.
What does it cost to skip registration?▼
Publication 510 sets a civil penalty, unless due to reasonable cause, of $10,000 for the initial failure and then $1,000 for each day after that.
Do I have to blend a lot before I count as a blender?▼
Publication 510 excludes a mixture removed or sold during the calendar quarter if all such mixtures removed or sold by the blender contain less than 400 gallons of a liquid on which tax hasn't been imposed. Above that, the blender rules apply.
File fuel excise tax 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: IRS Publication 510 (Rev. December 2025); Instructions for Form 720 (Rev. June 2026); Form 720 (Rev. June 2026). General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
