Form 6197, Gas Guzzler Tax
The gas guzzler tax is imposed on the sale, use, or lease by the manufacturer or
importer of an automobile of a model type that does not meet certain standards for
fuel economy. Automobiles imported for business or personal use are subject to the
tax. The tax liability is figured each quarter and reported on Form 720.
The estimate for your car is 21.3 miles per gallon and $1,300 is the penalty for
cars like yours that score at least 20.5 mpg but less than 21.5 mpg. Cars need a
rating of at least 22.5 mpg to avoid the tax.
In other words Gas Guzzler Tax
is assessed on new cars that do not meet required fuel economy levels. These taxes
apply only to passenger cars. Congress established
Gas Guzzler Tax provisions in the Energy Tax Act of 1978 to discourage the
production and purchase of fuel-inefficient vehicles
The gas guzzler tax is being paid on a one-time filing. Trucks, minivans, and sport
utility vehicles (SUV) are not covered because these vehicle types were not widely
available in 1978 and were rarely used for non-commercial purposes. The IRS is responsible
for administering the gas guzzler program and collecting the taxes from car manufacturers
or importers. The amount of tax is posted on the window stickers of new cars - the
lower the fuel economy, the higher the tax.
If you import a gas guzzling automobile, you may be eligible to make a one-time
filing for which no employer identification number is needed and no deposit is required.
Fuel Economy is calculated in Miles per Gallon (MPG) of the Automobile model type
and the tax rates are;
|
S.No.
|
At least
|
But Less Than
|
Tax Rate
|
|
1
|
22.5
|
-
|
$ 0
|
|
2
|
21.5
|
22.5
|
$ 1,000
|
|
3
|
20.5
|
21.5
|
$ 1,300
|
|
4
|
19.5
|
20.5
|
$ 1,700
|
|
5
|
18.5
|
19.5
|
$ 2,100
|
|
6
|
17.5
|
18.5
|
$ 2,600
|
|
7
|
16.5
|
17.5
|
$ 3,000
|
|
8
|
15.5
|
16.5
|
$ 3,700
|
|
9
|
14.5
|
15.5
|
$ 4,500
|
|
10
|
13.5
|
14.5
|
$ 5,400
|
|
11
|
12.5
|
13.5
|
$ 6,400
|
|
12
|
-
|
12.5
|
$ 7,700
|
One-Time Filing
If you import a gas guzzling automobile, you may be eligible to make a one-time
filing of Form 720 and Form 6197 if you meet both of the following conditions:
- You do not import gas guzzling
automobiles in the course of your trade or business and
- You are not required to file Form
720 reporting excise taxes for the calendar quarter, except for a one-time filing
Example:
In August 2006, H, an individual, imports a car. The car has a fuel economy rating
of 15 mpg, so H is liable for the gas guzzler tax of $4,500 (Form 6197, line 9).
H meets the two conditions for a one-time filing, that is, (1) does not import gas
guzzling automobiles in the course of his trade or business, and (2) is not otherwise
required to file Form 720. He must file Forms 720 and 6197 for the third calendar quarter of 2006.
H does not have to deposit the gas guzzler tax of $4,500 but instead pays with the
return. H checks the one-time filing box on Form 720.
How to report Gas Guzzler Tax in TaxExcise.com
In TaxExcise.com, you can prepare your
Gas Guzzler Excise Tax by creating your own account it is very easy and
simple to have your own account, and it is free.
Complete your personal detail by click on “One Time Filing”. You then click “Start
a New Return” button on the right side of dashboard choose “Form 720 Quarterly Federal Excise Tax Return. Choose your
Tax Year and The Quarter Ending Month. Continue with your Gas Guzzler Tax preparation
screen by screen. At any point of time you can call our Help Desk for additional
support, we’re more than happy to guide you through the filing process.