Proposed Excise Tax on Remittance Transfers
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
The proposed rule introduces a 1% excise tax on certain remittance transfers starting after December 31, 2025. This tax impacts remittance transfer providers and individuals who send money using physical forms of currency. Transfers funded by bank accounts, debit, or credit cards are exempt.
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Key Changes
- Introduction of a 1% remittance transfer tax
- Exemption for transfers funded by bank accounts and cards
- Obligation for remittance providers to collect and remit tax
Obligations
What this law requires
Remittance transfer providers must collect a 1% excise tax on remittance transfers funded by cash, money orders, cashier's checks, or similar physical instruments, effective for transfers occurring after December 31, 2025
Remittance transfer providers must remit the collected remittance transfer tax quarterly to the Secretary of the Treasury at the time and in the manner provided by the Secretary
Remittance transfer providers must make semimonthly deposits of remittance transfer tax pursuant to 26 CFR 40.6302(c)-1(a)(1)
Remittance transfer providers must file Form 720 (Quarterly Federal Excise Tax Return) to report the remittance transfer tax collected
If the remittance transfer tax is not collected at the time the transfer is made, the remittance transfer provider must pay the tax directly to the Secretary