Still mailing your Compressed Natural Gas Excise Taxes? File it Online in Minutes!

Submit your CNG Fuel Excise tax quickly and securely using Simple720, the IRS Authorized Form 720 efiling portal.

  • No manual calculations
  • No postal submissions
  • No Contracts
File Form 720 Online Now
Book a Demo

What Is the Compressed Natural Gas Tax (IRS No. 120)?

Compressed Natural Gas CNG is classified as an alternative fuel under federal excise tax rules. The tax applies when CNG is delivered into the fuel tank of a motor vehicle or motorboat, or sold in certain bulk transactions. This tax is reported on Form 720 under IRS No. 120 in the Fuel Taxes category.

Under Section 4081, alternative fuels such as CNG are taxable when used for highway transportation purposes. Unlike traditional gasoline or diesel, CNG is taxed based on energy content rather than liquid volume.

PCORI-Fee-Amount
Key Points Based on IRS Fuel Tax Guidance:

Form 720 Tax Rate: Compressed Natural Gas (CNG) is subject to federal excise tax at $0.183 per gasoline gallon equivalent (GGE) and must be reported on IRS Form 720 for the applicable quarter.

  • The tax applies when CNG is dispensed into a vehicle fuel tank or sold in qualifying bulk sales
  • Tax liability arises at the time of delivery or sale
  • The tax rate is based on gasoline gallon equivalent standards
  • Sellers and users must maintain proper transaction and usage records
Who Pays this Tax?

Any business or individual that sells, dispenses, or uses CNG as a motor fuel is responsible for reporting and paying this tax quarterly using IRS Form 720.

Why File Your CNG Tax Electronically?

Faster IRS Processing
Electronic submissions reach the IRS instantly and reduce processing delays compared to paper filings.
Instant Error Detection
Online filing systems flag missing or inconsistent data before submission, helping avoid rejections.
Quarterly Filing Made Simple
Electronic filing allows you to handle recurring Form 720 CNG tax filings with ease and consistency.

Steps to Complete Your Imported Chemical
Substances Excise Tax Filing

STEP 1
Enter Business Details
Provide your business name, address, EIN, and contact information.
Filing Steps Image 1
Filing Steps Image 2
STEP 2
Tax Information
Navigate to Environmental Taxes and select Taxable Imported Chemical Substances IRS Number 17.
Enter
  • Tax date
  • Number of Gallons
STEP 3
Payment Information
Review the tax amount and choose your preferred payment method to complete the filing.
Filing Steps Image 3
File Form 720 Online

Why Choose Simple720 for
Your CNG Fuel Tax Filing?

Built Specifically for Fuel Tax Filers
Simple720 is optimized for Form 720 fuel taxes including IRS No. 120, helping you file CNG taxes accurately every quarter.
Secure Digital Filing Records
All your CNG filings, tax calculations, and payment confirmations remain safely stored in one centralized dashboard.
IRS Authorized E Filing System
Simple720 is officially approved to securely transmit Form 720 fuel tax returns to the IRS with real-time validation and confirmation.

Simple720 Vs Others

IRS Authorized e-Filer Brand X Brand Y Brand Z
Cloud-Based Yes No No No
Software Download None Yes-PC Only Yes Yes
License None Required Required Required
Annual Contract No Required Required Required
All Excise Taxes Yes Fuel Taxes Only No No
Cost $59.95/return $1,000+/yr. $1,500+/yr. $5,000+/yr.
Testimonial
What Clients Are Saying
- Martha, Texas

Smooth and Quick Filing Experience
We were able to submit our CNG fuel taxes without delays or confusion. The system was very easy to follow.

- Chris Lam, California

Accurate Calculations Every Time
Earlier we struggled with manual errors. Simple720 made sure our CNG tax was calculated correctly for IRS No. 120.

- Williams,Illinois

Reliable for Ongoing Compliance
Our quarterly filings are now organized and accessible anytime. This has simplified our compliance process completely.

File Form 720 Online

Frequently Asked Questions

Compressed Natural Gas CNG is classified as an alternative fuel and reported under IRS No. 120 in the Fuel Taxes category on Form 720.

CNG becomes taxable when it is delivered into a motor vehicle or motorboat fuel tank or sold in qualifying bulk transactions.

Yes. Section 4081 governs the excise tax on alternative fuels used in highway transportation including CNG.

Businesses that sell, dispense, or use CNG as a motor fuel must file and pay the tax quarterly using Form 720.

Yes. You can electronically file your CNG tax using an IRS Authorized platform like Simple720 for faster processing and instant confirmation.

Want to learn more?
Request a free demo today! Our experts are ready to assist you.

Book a Demo
infoTag