OrangeStar

Domestic segment tax. For amounts paid for each domestic segment of taxable transportation of person by air (IRS No. 26), the domestic segment tax is $3.50 per segment for transportation that begins in 2008.

Use of international air travel facilities. The tax on use of international air travel facilities (IRS No. 27) has increased for amounts paid during 2008. For flights that begin or end in the United States, the tax is $15.40 per person. For domestic segments that begin or end in Alaska or Hawaii (applies only to departures), the tax is $7.70 per person.

Dyed diesel fuel used in trains. The train operator is no longer liable for the leaking underground storage tank (LUST) tax on dyed diesel fuel used in trains. IRS No. 71 has been removed from Form 720. The position holder of the dyed diesel fuel generally is liable for the LUST tax under IRS No. 105.

Arrow shafts. The tax on arrow shafts (IRS No. 106) is $.43 per arrow shaft.

Inland waterways fuel use tax (IRS No. 64). Generally, the inland waterways fuel use tax is $.20. However, certain fuels must also be reported under IRS No. 125 (see below).

LUST tax on inland waterways fuel use (IRS No. 125). The leaking underground storage tank (LUST) tax must be paid on any liquid fuel used on inland waterways that is not subject to LUST tax under section 4041(d) or 4081. For example, gallons of Bunker C residual fuel oil must be reported under both IRS Nos. 64 and 125.

Disregarded entities and qualified subchapter S subsidiaries. After December 31, 2007, qualified subchapter S subsidiaries (QSubs) and eligible single-owner disregarded entities are treated as separate entities for excise tax and reporting purposes. QSubs and eligible single-owner disregarded entities must pay and report excise taxes (other than IRS Nos. 31, 51, and 117), register for excise tax activities, and claim any refunds, credits, and payments under the entity's employer identification number (EIN). These actions cannot take place under the owner's taxpayer identification number (TIN). Some QSubs and disregarded entities may already have an EIN. However, if you are unsure, please call the IRS Business and Specialty Tax line at 1-800-829-4933. For more information on applying for an EIN, see Employer Identification Number (EIN) on page 3. Generally, QSubs and eligible single-owner disregarded entities will continue to be treated as disregarded entities for other federal tax purposes (other than employment taxes). Thus, taxpayers filing Form 4136, Credit for Federal Tax Paid on Fuels, with Form 1040, Individual Income Tax Return, can use the owner's TIN. For more information on these new regulations, see Treasury Decision (T.D.) 9356. You can find T.D. 9356 on page 675 of Internal Revenue Bulletin 2007-39 at www.irs.gov/pub/irs-irbs/irb07-39.pdf.

Electronic filing. You can now electronically file Form 720 through any electronic return originator (ERO), transmitter, and/or intermediate service provider (ISP) participating in the IRS e-file program for excise taxes. For more information on e-file, visit the IRS website at
www.irs.gov/efile.

Electronic payment. Now, more than ever before, businesses can enjoy the benefits of paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, the IRS offers you a convenient program to make it easier. Spend less time on taxes and more time running your business. Use the Electronic Federal Tax Payment System (EFTPS) to your benefit. For information on EFTPS, visit www.eftps.gov or call the EFTPS Customer Service at 1-800-555-4477. If you are filing Form 720 electronically, you can choose to pay using electronic funds withdrawal (direct debit). For more information, see How To Make Deposits on page 7.