Step-by-Step Guide to Filing Form 720 for Ship Passenger Taxes

Under Section 4471 of the IRS Code, an excise tax is levied on commercial ship operators that provide specific types of trips on vessels designed to accommodate at least 17 passengers. This tax is calculated based on the number of passengers transported during a given quarter. Additionally, the tax applies to passengers on any commercial vessel that offers onboard gambling activities while the ship operates outside U.S. territorial waters.

Ship Passenger Excise Taxes are filed quarterly using Form 720, Quarterly Federal Excise Tax Return. There are two methods available for filing:

• Manual Filing: The traditional pen-and-paper method, where you complete and mail the form to the IRS.

• Online Filing: The electronic filing method, which allows you to submit Form 720 through an approved IRS e-file provider for faster and more efficient processing.

Choose the method that best suits your needs to ensure timely and accurate submission of your taxes.

1. Download Form 720: Obtain the latest version of Form 720, Quarterly Federal Excise Tax Return, from the official IRS website.

2. Provide Business Details: Complete the form by filling in the following information:

• Your business name.

• The quarter for which you are filing.

• Your business address.

• Your Employer Identification Number (EIN).

3. Locate Section 29 - Ship Passenger Excise Tax: Navigate directly to Line 29 on Form 720, designated for the Ship Passenger Excise Tax.

4. Enter Passenger Details: Provide the total number of passengers subject to this tax.

• The tax rate is $3 per passenger, as specified on Form 720.

• Calculate the total tax by multiplying the number of passengers by $3.
  Example: For 3 passengers, enter $9 as the tax amount.

5. Attach Payment: Write a cheque for the calculated tax amount and attach it to the completed Form 720.

6. Review and Submit: Double-check the form for accuracy before mailing it along with your payment to the official IRS mailing address provided in the form's instructions.

This method ensures proper filing and timely compliance with the Ship Passenger Excise Tax requirements.

The online method is the IRS-recommended approach due to its efficiency and faster processing time. Here’s how to file electronically:

1. Select an IRS-Approved Portal: Start by choosing an online portal authorized by the IRS to handle electronic filings. Opting for a trusted and approved portal ensures a smooth and secure filing process as the IRS directly monitors submissions through these platforms.

2. Simplify with Simple720: For a hassle-free experience, consider using Simple720, our IRS-approved portal. It is designed to make filing quick and straightforward, allowing you to complete the process in just a few minutes.