Compliance
Compliance Essentials for New Excise Rules Under the One, Big, Beautiful Bill
Businesses sending remittances or lenders dealing with vehicle loans face new excise tax deposit requirements and reporting obligations—this article helps you comply without missteps.
By NomadicTax Research Team • 5-8 min read • November 15, 2025
## What Businesses Need to Know
Starting **January 1, 2026**, certain remittance transfers will carry a **1% excise tax** under section 4475, imposed by the One, Big, Beautiful Bill. The IRS issued **Notice 2025-55** to provide **penalty relief** for deposit failures during the first three quarters of 2026. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
Similarly, businesses that **lend for vehicle purchases** will be subject to new **information reporting requirements** under OBBB, and transitional guidance has been issued via **Notice 2025-57**. ([irs.gov](https://www.irs.gov/newsroom?utm_source=openai))
## What Remittance Transfer Providers Must Do
- If you provide remittance transfers using cash, money order, cashier’s check, or similar physical instruments, collect the excise tax from senders. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
- Begin **making semimonthly deposit payments**; the first semimonthly period due date is **January 29, 2026**, covering Jan. 1–15. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
- File **quarterly excise returns** (Form 720) for the remittance tax.
- During Q1–Q3 2026, if deposits are incorrect but made timely, and the full tax is paid by the quarterly return due date, penalty relief applies. Use the deposit safe harbor rules, with reasonable cause standard. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-remittance-transfer-providers-who-fail-to-deposit-excise-tax-under-the-one-big-beautiful-bill?utm_source=openai))
## For Lenders Reporting Vehicle Loan Interest
- Under OBBB, for vehicle loans originated after Dec. 31, 2024, businesses must report interest paid for qualifying vehicles used personally—and lenders are required to report interest they receive. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- Notice 2025-57 offers transitional relief for lenders for the 2025 reporting year. That means mistakes or late reporting in 2025 may be met with leniency [if you follow guidance]. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
## Tips for Staying Compliant
- **Train staff** on distinguishing which remittances trigger the excise tax, and which vehicle loans are reportable.
- **Set up reliable tracking systems**—capture the right data now so you’re ready by 2026. Missing data (e.g., qualifying vehicle specs or VIN) can lead to penalties later.
- **Document decisions and reliance.** If relying on safe harbor or provisional guidance, retain records showing that you followed IRS notices and that any underpayment was paid by the due date of Form 720.
- **Consult your vendor or software provider** for Update patches or features—many tax and accounting platforms will roll in required forms and reporting flags.
## Real-World Example
Jane's Remittance Co. sends remittances and involves physical checks. In 2026, when Jane begins collecting excise tax, she miscalculates Q1 deposits—but makes them on time and ensures by April 30 (Form 720 due date) that she remits the full amount. Under Notice 2025-55, Jane avoids failure to deposit penalties because she satisfied timely deposit and full payment terms.
Lender XYZ makes vehicle loans in mid-2025. They receive interest payments but overlook reporting requirements. Because Notice 2025-57 gives **transitional relief** in 2025, Lender XYZ may get some leniency—but must prepare to fully comply in 2026.
## Conclusion
The new excise taxes and reporting obligations under OBBB impose fresh compliance burdens. But with IRS guidance and transitional relief, businesses have time to adapt systems, train people, and plan ahead. **Ignoring these requirements risks penalties; preparing early can save costs and headaches.**