Who pays the federal excise tax?

Full answer

The person legally responsible for a federal excise tax depends on the tax involved. Some taxes are imposed directly on manufacturers, importers, retailers, or other businesses. Others are imposed on customers but must be collected and remitted by the business receiving payment.

For example, customers pay the tax on taxable indoor tanning services, while the provider collects it and reports it on Form 720. If the provider fails to collect that tax, the provider remains liable. Certain health plan fees, such as the PCORI fee, are instead paid by the responsible insurer or plan sponsor.

A business may build excise taxes into its prices, but that does not change its legal filing responsibility. Check the specific tax rules to identify who owes, who collects, and who reports the payment.