Federal Excise tax goods are products or services that are harmful to the environment or people.Your business needs to fill out IRS Form 720 if you sell goods or services that incur excise taxes. These products and services can include, but are not limited to:

Firearms
Fishing equipment
Foreign insurance
Gambling
Gasoline
Indoor tanning services
Tires (for highway vehicles)
Trucks & trailers
Tobacco products
Airline tickets
Alcohol
Automobiles (that consume large amounts of gasoline)
Bow & Arrows (and accessories)
Business telephone lines
Coal products
Crude oil and petroleum products
Electric outboard motors
Telephone communications.
Air transportation.
Passenger ship transportation.
Indoor tanning services.
Bows and arrows.
Tires.
Vaccines.


Form 720 can be imposed by federal, state, or local governments. Federal excise taxes are reported and paid through form 720. If your business does not deal with any of these products or services, you do not have to fill out this tax form.

Two other conditions determine whether you need to complete Form 720, per the instructions from the IRS:
“You were liable for, or responsible for collecting, any of the federal excise taxes listed on Form 720, Parts I and II, for a prior quarter and you haven’t filed a final return.
“You were liable for, or responsible for collecting, any of the federal excise taxes listed on Form 720, Parts I and II, for the current quarter.”

Although alcohol, tobacco and firearms require excise taxes, they're not covered under IRS Form 720. These products are regulated by the Alcohol and Tobacco Tax and Trade Bureau, and taxes must be filed using the return form on its website.