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 the federal excise tax 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, the 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 producing and purchasing fuel-inefficient vehicles.

The gas guzzler tax is being paid on a one-time filing. Trucks, minivans, and sport utility vehicles (SUVs) 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 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.
  • You are not required to file Form 720 reporting excise taxes for the calendar quarter, except for a one-time filing.

To make a one-time filing:

  • File the return for the quarter in which you incur liability for the tax.
  • Pay the tax with the return. No deposits are required.
  • If you are an individual and do not have an employer identification number (EIN), enter your social security number (SSN) or individual taxpayer identification number (ITIN) on Form 720 and Form 720-V, Payment Voucher, in the space for the EIN.
  • Check the one-time filing box above the Part I of Form 720.

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.

E-file Form 720 Gas Guzzler Tax at TaxExcise.com!

TaxExcise.com is an IRS-approved modernized online tax filing service provider that supports federal excise tax form 720. E-filing your form 720 online is the smartest way to report your quarterly federal excise taxes. Either you do the one-time filing for form 720 gas guzzler tax, or you file form 720 for every quarter; E-filing form 720 at TaxExcise.com is the best way to report your excise taxes to the IRS and get the acknowledgment immediately.

For one-time filing, you need complete your personal details by clicking the 'One-time Filing' option in our online application and then click the 'Start a New Return' option. After that, select the form 720 quarterly federal excise tax return option and proceed further. You must choose your tax year and quarter-ending month and continue with your gas guzzler tax preparation screen by screen. You will be done with your tax preparation in a few steps, and this overall process takes just a few minutes to complete. After you transmit your tax returns to the IRS, they will immediately process them and send the acknowledgment to your registered email address. You can also access your tax returns summary, approvals, and everything from your TaxExcise.com profile dashboard.

FAQs

What is Gas Guzzler Tax?

The gas guzzler tax is the federal excise tax imposed on automobiles or cars with high fuel consumption rates. The owners of these types of cars are required to pay taxes for the fuel consumption of their cars.

Form 6197 is the gas guzzler tax form which has to be attached with the federal excise tax form 720 for reporting excise taxes. Form 6197 is attached with form 720 to calculate the tax liabilities based on the car's fuel economy.

You are eligible to do a one-time filing of your gas guzzler tax when you import your automobile if you need certain conditions. You can do the one-timing filing if you didn't import your automobile for the course of your business or trade, and you are not required to file Form 720 reporting excise taxes for the calendar quarter, except for a one-time filing. You have to make sure that you check the 'one-time filing' box while filling your gas guzzler tax reports.

If you are an individual taxpayer and don't have an EIN, you should use your Social Security Number (SSN) in place of EIN and report your gas guzzler tax to the IRS.

You don't have to make any deposits for your gas guzzler tax payments. You need to report your taxes and pay them using the federal excise tax form 720 and attach form 6197 to show your tax computation.