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Aviation operators already juggle flight schedules, fuel planning, crew, safety checks. When tax season comes in, the confusion around Form 720 adds one more thing to the list. Many operators are unsure whether the excise tax rules apply to them or only to major airlines. The rules change based on the type of flight, the fuel used, and how the aircraft is operated, so it is natural to feel unsure.

This guide helps clear that confusion. If you work in aviation and want to know whether Form 720 is part of your 2026 filing duties, the upcoming sections break it down in a simple way.

Form 720 is the quarterly return the IRS uses to collect excise taxes, and aviation is one of the industries included in it. For operators, the form mainly focuses on two areas. Air transportation taxes and aviation fuel taxes.

Air transportation taxes include:

• Tax on transporting passengers by air (IRS No. 26)

• Tax on transporting property by air (IRS No. 28)

Aviation fuel taxes include:

• Kerosene used in aviation (IRS No. 69)

• Kerosene used in commercial aviation (IRS No. 77)

• Kerosene for use in aviation, LUST tax on nontaxable uses (IRS No. 111)

Understanding these categories helps operators know whether their flights or fuel usage fall under excise tax rules for 2026.

Aviation excise taxes apply only to certain activities, and the IRS lists these clearly in Form 720. Understanding these activities helps operators know when a filing is required for 2026.

Air Transportation Taxes

The IRS charges excise tax on two main types of air transportation:

• Transporting passengers by air
  This applies when an operator provides air travel for individuals. Scheduled flights, charter flights, and similar services fall under this category.
  
  

• Transporting property by air
  This covers the movement of cargo, parcels, or freight by air. Any operator that carries property for a fee may fall under this tax.
  

Both of these appear under the “Communications and Air Transportation Taxes” section of Form 720.

Aviation Fuel Taxes

The IRS also applies excise tax to several types of aviation fuel uses. The tax rate and responsibility depend on how the fuel is used.

Common taxable fuel activities include:

• Kerosene used in aviation (non-commercial use)
  This applies when kerosene is used for general aviation that does not qualify as commercial.
  
  

• Kerosene used in commercial aviation
  This applies when an operator uses kerosene for flights that meet the IRS definition of commercial aviation.
  
  

• Kerosene removed directly into an aircraft fuel tank
  The act of removing or delivering kerosene into the aircraft’s fuel tank itself can trigger tax liability.
  
  

• Aviation gasoline
  Some operators still use aviation gasoline, and this fuel type has its own excise tax rules.

The IRS instructions for Form 720 explain the exact IRS numbers, tax rates, and conditions for each type of fuel. Operators are responsible for knowing which category applies to their aircraft and operations.

The IRS has a few aviation-specific rules that can change how much tax an operator owes and when a return must be filed. These rules matter because fuel use and flight type are not treated the same in every situation.

Registered commercial aviation operators

Some operators are registered with the IRS as commercial aviation operators. When they fit this category, certain fuel uses fall under different tax rules. The IRS applies separate tax numbers and rates for commercial fuel use compared to general aviation.

Change in fuel use

If fuel is first intended for one purpose and later used in a different way, the tax treatment can change. A switch between commercial and non-commercial use affects who is responsible for the tax and which IRS number applies.

Fuel used for nontaxable purposes

If fuel is bought with tax included but later used for a purpose that does not require excise tax, the operator may be eligible for a credit. In that case, Form 4136 is used to request credit or refund for tax already paid.

Fuel removals into aircraft

The IRS notes that some fuel removals into an aircraft fuel tank are taxable even when the operator is not carrying passengers or property for hire. The act of removing the fuel into the tank can itself create tax liability, depending on the situation.

Aviation operators need to keep solid records to support whatever they report on Form 720. These records help show how the aircraft was used, how fuel was handled, and which activities were taxable or nontaxable. 

The records usually include:

• Logs that show passenger or cargo movements

• Fuel purchase receipts and usage details

• Notes or forms showing when fuel was removed into an aircraft tank

• Invoices that separate taxable and nontaxable fuel use

• Any forms used to claim credits or refunds, such as Form 4136
  
  

The IRS expects operators to keep these documents for as long as they might be needed for review.

How to File Form 720 Online Using IRS-Authorized Portal

Seamless Filing with IRS-Authorized Portals:
Aviation operators can easily file Form 720 online through IRS-approved e-filing portals. These platforms are specifically designed for excise tax returns and ensure compliance with all IRS requirements.

efile720 – A Top Choice:
One of the most reliable options for online filing is efile720, a trusted IRS-authorized portal for submitting Form 720 electronically.

User-Friendly Interface:
efile720 simplifies the filing process with an easy-to-use interface that guides users through form entry, tax calculation, and payment.

Instant Acknowledgment:
The platform formats the return automatically to meet IRS specifications and provides an instant acknowledgment upon successful submission.

Effortless Compliance:
Using an IRS-authorized portal like efile720 ensures smooth filing and helps aviation operators stay compliant with the IRS.

Conclusion

Form 720 may look like another IRS requirement, but for aviation operators it is simply a routine part of running a regulated business. Once you know which activities fall under federal excise tax, the rest becomes a straightforward checklist. The goal is not to complicate your operations, but to keep everything clear on paper so your flights continue without interruptions.

As 2026 approaches, treating this filing as a regular administrative step helps keep your books clean and your compliance in place. A little clarity now saves a lot of trouble later, which is exactly what every operator needs in a busy industry.

File your Aviation related Federal Excise Taxes Online through eFile720 Portal.