Part II

Patient-centered outcomes research (PCOR) fee (IRS No. 133). The PCOR fee is imposed on issuers of specified health insurance policies (section 4375) and plan sponsors of applicable self-insured health plans (section 4376) for policy and plan years ending on or after October 1, 2012. Generally, references to taxes on Form 720 include this fee. Specified health insurance policies. For issuers of specified health insurance policies, the fee for a policy year ending on or after October 1, 2025, but before October 1, 2026, is $3.84 (line 133(b)) ($3.47 for a policy year ending on or after October 1, 2024, but before October 1, 2025 (line 133(a)), multiplied by the average number of lives covered under the policy for that policy year. Generally, issuers of specified health insurance policies must use one of the following four

• You aren't required to file Form 720 reporting excise taxes for the calendar quarter, except for a one-time filing.

Instructions for Form 720 (Rev. 06-2026) 9

alternative methods to determine the average number of lives covered under a policy for the policy year.

1. The actual count method.
2. The snapshot method.
3. The member months method.
4. The state form method.

Applicable self-insured health plans. For plan sponsors of applicable self-insured health plans, the fee for a plan year ending on or after October 1, 2025, but before October 1, 2026, is $3.84 (line 133(d)) ($3.47 for a policy year ending on or after October 1, 2024, but before October 1, 2025 (line 133(c)), multiplied by the average number of lives covered under the plan for that plan year. Generally, plan sponsors of applicable self-insured health plans must use one of the following three alternative methods to determine the average number of lives covered under a plan for the plan year.

1. Actual count method.
2. Snapshot method.
3. Form 5500 method.

Reporting and paying the fee. File Form 720 annually to report and pay the fee on the second-quarter Form 720 no later than July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies. Because the rate used to determine the fee varies from year to year, you should determine the fee using the instructions for the second-quarter Form 720. If you file Form 720 only to report the fee, don't file Form 720 for the first, third, or fourth quarter of the year. If you file Form 720 to report quarterly excise tax liability for the first, third, or fourth quarter of the year (for example, filers reporting the foreign insurance tax (IRS No. 30), don't make an entry on the line for IRS No. 133 on those filings).

Deposits aren't required for this fee, so issuers and plan sponsors aren't required to pay the fee using EFTPS. However, if the fee is paid using EFTPS, the payment should be applied to the second quarter. See Electronic deposit requirement under Payment of Taxes, later.

articles. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 41.

Fishing rods and fishing poles (IRS No. 110). The tax on fishing rods and fishing poles (and component parts) taxed at a rate of 10% will have a maximum tax of $10 per article. The tax is paid by the manufacturer, producer, or importer. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 110.

Electric outboard motors (IRS No. 42). The tax on an electric outboard motor is 3% of the sales price. The tax is paid by the manufacturer, producer, or importer. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 42.

Fishing tackle boxes (IRS No. 114). The tax on fishing tackle boxes is 3% of the sales price. The tax is paid by the manufacturer, producer, or importer. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 114.

Bows, quivers, broadheads, and points (IRS No. 44). The tax on bows is 11% of the sales price. The tax is paid by the manufacturer, producer, or importer. It applies to bows having a peak draw weight of 30 pounds or more. The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 44.

Report the average number of lives covered in column (a). Apply the applicable rate (column (b)) and enter the fee in column (c).

Combine the fees for specified health insurance policies and applicable self-insured health plans and enter the total in the “Tax” column on the line for IRS No. 133.

More information. For more information, including methods for calculating the average number of lives covered, see sections 4375, 4376, and 4377.

Sport fishing equipment (other than fishing rods and fishing poles) (IRS No. 41). The tax on sport fishing equipment is 10% of the sales price. The tax is paid by the manufacturer, producer, or importer. Taxable articles include reels, fly fishing lines (and other lines not over 130 pounds test), fishing spears, spear guns, spear tips, terminal tackle, fishing supplies and accessories, and any parts or accessories sold on or in connection with these articles. See Pub. 510 for a complete list of taxable

Arrow shafts (IRS No. 106). The tax on arrow shafts is increased to $0.65 per arrow shaft. The tax is paid by the manufacturer, producer, or importer of any arrow shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow which after its assembly meets either of the following conditions.

• It measures 18 inches or more in overall length.

• It measures less than 18 inches in overall length but is suitable for use with a taxable bow, described earlier.

Exemption for certain wooden arrows. The tax doesn't apply to any shaft made of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) and used in the manufacture of any arrow which after its assembly meets both of the following conditions.

Add the tax on each sale during the quarter and enter the total on the line for IRS No. 106.

Indoor Tanning Services Tax

Indoor tanning services (IRS No. 140). The tax on indoor tanning service is 10% of the amount paid for that service. The tax is paid by the person paying for the indoor tanning service and is collected by the person receiving payment for the indoor tanning services.

Who must file. The person receiving the payment for indoor tanning services (collector) must collect and remit

• It measures ⁵ /16 of an inch or less in diameter.

• It isn't suitable for use with a taxable bow, described earlier.

10 Instructions for Form 720 (Rev. 06-2026)

the tax and file the return. If the tax isn't collected for any reason, the collector is liable for the tax.

Definition of indoor tanning services. “Indoor tanning services” means a service employing any electronic product designed to incorporate one or more ultraviolet lamps and intended for the irradiation of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning. The term doesn't include phototherapy service performed by, and on the premises of, a licensed medical professional (such as a dermatologist, psychologist, or registered nurse). See Regulations section 49.5000B-1 for more information and special rules for qualified physical fitness facilities, undesignated payment cards, and bundled payments.

Enter the amount of indoor tanning services tax collected (or due for failing to collect the tax) for the quarter on the line for IRS No. 140.

Other Part II Taxes

Inland waterways fuel use tax (IRS No. 64). If you are liable for the inland waterways fuel use tax, report the number of gallons subject to tax on the line for IRS No. 64. Certain fuels must also be reported under IRS No. 125 (discussed next).

Caution: The inland waterways fuel use tax applies at the rate listed on Form 720. This is in addition to all other taxes imposed on the sale or use of the fuel.

Leaking underground storage tank (LUST) tax on in­ land waterways fuel use (IRS No. 125). The LUST tax must be paid on any liquid fuel used on inland waterways that isn't 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.

Section 40 fuels (IRS No. 51). An excise tax is imposed (recaptured) if you claim the second generation biofuel producer credit and you don't use the fuel for the purposes described under Qualified Second Generation Biofuel Production in the Instructions for Form 6478, Biofuel Producer Credit. When recapturing, you must pay a tax on each gallon of second generation biofuel at the rate you used to figure the credit.

The tax rate for second generation biofuel is $1.01 per gallon. Fill in the number of gallons and the appropriate rate in the “Rate” column on the line for IRS No. 51.

Biodiesel sold as, but not used as, fuel (IRS No. 117). You must pay a tax (recapture) on each gallon of biodiesel or renewable diesel on which a credit was claimed at the rate used to figure the credit if you:

• Use it (including a mixture) other than as a fuel;

• Buy it at retail and use it to create a mixture;

• Separate it from a mixture; or

• Use agri-biodiesel on which the small agri-biodiesel producer credit was claimed for a use not described under Qualified Agri-Biodiesel Production in the Instructions for Form 8864, Biodiesel, Renewable Diesel, or Sustainable Aviation Fuels Credit.

The rate of tax depends on the applicable rate used to figure the credit. No deposits are required. Fill in the number of gallons and the appropriate rate in the “Rate” column on the line for IRS No. 117. If more than one

rate applies, leave the “Rate” column blank and attach a schedule showing the rates and number of gallons taxed at each rate.

Floor Stocks Tax

Ozone-depleting chemicals floor stocks tax (IRS No. 20). Use Form 6627 to figure the liability for this tax. Enter the amount from column (d) of Form 6627, Part IV, line 4, on the line for IRS No. 20. Attach Form 6627 to the Form 720 that is due July 31 of each year.

Excise Tax on Repurchase of Corporate Stock

IRS No. 150. Use Form 7208 to figure the liability for this tax. Enter the amount from Form 7208, Part V, line 11. Attach your Form 7208 to your Form 720, due for the first full quarter after the close of your tax year.

Sales of Designated Drugs During Statutory Periods

IRS No. 142. Section 5000D imposes an excise tax on the sale by the manufacturer, producer, or importer of any designated drug during a day that falls within a period described in section 5000D(b). Under Regulations section 40.6011(a)-1, taxpayers are required to report any section 5000D drug tax liability on Form 720. This regulation applies to calendar quarters beginning on or after October 1, 2023. You may be required to file Form 720-X to report revisions to previously reported section 5000D liabilities.