Gas Guzzler Tax

If you buy a car with low gas mileage there is an extra tax you must pay.

The Energy Tax Act of 1978 established a Gas Guzzler Tax on the sale of new model year vehicles whose fuel economy fails to meet certain statutory levels. The gas guzzler tax applies only to cars (not trucks) and is collected by the IRS.

A federal “gas guzzler” tax is collected on new automobiles that have a fuel economy rating of less than 22.5 miles-per-gallon (MPG). Minivans, sports utility vehicles, and automobiles weighing more than 6,000 pounds are exempt from the tax. Because of the exemptions, very few vehicles are subject to the tax. The tax ranges from $1,000 for automobiles with MPG standards of between 21.5 and 22.5 to $7,700 for vehicles with MPG standards of less than 12.5.
The fuel economy figures used to determine the Gas Guzzler Tax are different from the fuel economy values from the EPA. The tax does not depend on you actual on-the-road mpg, which may be more or less than the EPA published value. The purpose of the Gas Guzzler Tax is to discourage the production and purchase of fuel inefficient vehicles. The amount of any applicable Gas Guzzler Tax paid by the manufacturer will be disclosed on the automobile’s fuel economy label (the window sticker on new cars).

The combined fuel economy MPG value (55% city, 45% highway) is used to determine the tax liability. The MPG value is also adjusted slightly to account for differences in test procedures since the base year.
The MPG is not adjusted for in-use short fall. The unadjusted combined MPG of a vehicle can be approximated from the city and highway values provided in the Fuel Economy Guide by the following equation:

(1/(.495/city MPG + .351/Highway MPG)) + .15

Check out the list of vehicles subject to the tax here.

Gas Guzzler Tax

Unadjusted MPG (combined)
at least 22.5
No Tax
at least 21.5, but less than 22.5
at least 20.5, but less than 21.5
at least 19.5, but less than 20.5
at least 18.5, but less than 19.5
at least 17.5, but less than 18.5
at least 16.5, but less than 17.5
at least 15.5, but less than 16.5
at least 14.5, but less than 15.5
at least 13.5, but less than 14.5
at least 12.5, but less than 13.5
less than 12.5