What Is the Gas Guzzler Tax?
What is a gas guzzler tax? It's a federal excise tax charged when a manufacturer sells a car whose model type gets less than 22.5 miles per gallon, as measured by the EPA. The tax falls on the maker or importer, not on the person shopping at a dealership. The rate depends on the car's fuel economy rating, and the IRS prints the rate schedule on Form 6197. The tax is reported on Form 720. See our gas guzzler tax page for the mpg rate schedule and filing details.
Who owes it: makers versus buyers
The word that decides this is "manufacturer." For this tax, it reaches well past a car factory.
| You are | Do you owe it? | Why |
|---|---|---|
| A company that builds automobiles and sells them | Yes, on taxable sales | The tax is imposed on the sale by the manufacturer. |
| An importer selling automobiles | Yes, on taxable sales | "Manufacturer" includes a producer or importer. |
| Someone importing a car for personal use | You may | Pub. 510 says you may be liable, and a one-time filing may be available. |
| A shop that lengthens an existing car | Yes, on taxable sales | A person that lengthens an existing automobile is the manufacturer of an automobile. |
| Someone who furnishes materials and keeps title while another firm builds the car | Yes, on taxable sales | You are considered the manufacturer even though another person actually manufactures it. |
| A person buying a U.S.-market car from a dealer | No filing named | The IRS sources place liability on the manufacturer. A retail buyer who imports nothing isn't named as a filer. |
A dealer that only resells cars bought from the manufacturer isn't described as liable in these sources either. A dealer that imports the car itself is an importer, though, and that changes the answer.
If that importer row is you, read our detailed post on the gas guzzler tax for vehicle importers.
Which vehicles count as an automobile?
For this tax, an automobile, including a limousine, must meet all three tests:
- Rated at an unloaded gross vehicle weight of 6,000 pounds or less.
- Propelled by an engine powered by gasoline or diesel fuel.
- Intended for use mainly on public streets, roads, and highways.
These vehicles aren't considered automobiles for this tax, even if they'd otherwise seem to qualify:
- Limousines with a gross unloaded vehicle weight of more than 6,000 pounds.
- Vehicles operated exclusively on a rail or rails.
- Vehicles sold for use and used primarily as ambulances or combination ambulance-hearses, for police or other law enforcement by governments, or for firefighting.
- Vehicles treated under 49 U.S.C. 32901 (1978) as non-passenger automobiles, including limousines made primarily to carry more than 10 people.
The emergency-use point has a catch. The manufacturer can sell such a vehicle tax free only when it sells directly to the buyer for that use, and both parties are registered, though a state or local government buyer doesn't need to be.
How do fuel economy ratings set the tax?
Fuel economy is the average miles an automobile travels on a gallon of gasoline or diesel, rounded to the nearest 0.1 mile as figured by the EPA. The rating belongs to the model type, a class of automobile set by EPA regulations, and not to your own mileage in everyday driving.
The tax starts below 22.5 mpg and the rate moves with the rating. The IRS sources behind this article say the rates are shown on Form 6197, so read the schedule from that form for your return. A quick test for the threshold, using made-up ratings:
| EPA rating of the model type | Result |
|---|---|
| 25.0 mpg | Above the line, no gas guzzler tax |
| 22.5 mpg | At the line, no gas guzzler tax |
| 22.4 mpg | Below the line, tax applies at the Form 6197 rate |
Imported cars can raise an extra question, because some have no assigned rating. A car converted to match one already certified for U.S. sale may use that car's rating. A modified car generally has no rating available, since the EPA doesn't require a highway test on it. A separate test would be needed, or the car is presumed to fall in the lowest fuel economy rating category.
When does the tax apply?
- Sale: tax attaches when title passes from the manufacturer to the buyer, based on the intent of the parties as shown in the contract of sale.
- Use: a manufacturer who uses the car is liable as if it were sold, and tax attaches when use begins.
- Lease: only the first lease by the manufacturer counts as a sale, not any renewal or extension. That's narrower than the general rule for other manufacturers taxes.
How is it reported, and what do you do next?
Use Form 6197 to figure the tax for each quarter and attach it to Form 720, on the line for IRS No. 40 in Part I. Our gas guzzler tax filing page has the steps.
If you're a retail buyer who only bought a U.S.-market car, nothing in the IRS sources we reviewed calls for you to file this tax. If you make, import, or lengthen automobiles, your next step is to confirm the rating, then enter the figures on your return. You can file Form 720 online with EasyFile720, an IRS-authorized e-file provider covering Part I categories. It's free to create an account with no credit card, and you pay $39.95 when you file. Validations catch common mistakes before you submit, and you get an electronic acknowledgment from the IRS once the return is accepted.
FAQ
Does a car rated exactly 22.5 mpg owe the tax?▼
No. The tax applies to model types rated at less than 22.5 miles per gallon. Fuel economy is rounded to the nearest 0.1 mile as figured by the EPA.
Do electric cars pay the gas guzzler tax?▼
The Pub. 510 definition of an automobile requires an engine powered by gasoline or diesel fuel. A vehicle that does not meet that definition is not an automobile for this tax.
Does my pickup or large SUV count?▼
An automobile here is rated at an unloaded gross vehicle weight of 6,000 pounds or less. Vehicles treated under 49 U.S.C. 32901 (1978) as non-passenger automobiles are also outside the tax.
Can a state agency buy a gas guzzler tax free?▼
Not because it is a government. No one is exempt, including state and local governments. A vehicle sold for and used primarily for police, firefighting, or ambulance purposes can fall outside the definition instead, under the conditions Pub. 510 gives.
File Form 720 online
Create a free account with no credit card and build your return. You pay $39.95 only when you file. EasyFile720 is an IRS-authorized e-file provider, and you get an acknowledgment when the IRS accepts your return.
Sources: Pub. 510 (Rev. December 2025); Instructions for Form 720 (Rev. June 2026); Form 720 (Rev. June 2026). General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
