What is the Gas Guzzler Tax?
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. The fuel economy figures used to determine the Gas Guzzler Tax are different from the fuel economy values provided on this web site and in the Fuel Economy Guide. The tax does not depend on your 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 gas guzzler tax is a tax which is designed to discourage the production and sale of vehicles with poor fuel economy, known as gas guzzlers because they “drink” large amounts of gas to stay on the road. This tax is assessed at the time of sale, and it is based upon the fuel economy of the vehicle, not the purchase price. It is important to remember that since issues of energy use and fuel economy are getting more pressing, the gas guzzler tax is only one part of a complex framework in the United States. The tax was passed as part of the Energy Act of 1978, an act which was passed in response to the oil crisis of the 1970s. Members of Congress were very concerned that Americans were heavily relying on oil, and they wanted to encourage the production of more fuel efficient vehicles to avoid another economic catastrophe brought about by fluctuations in oil price. The 1970s also brought about a rise in concerns about the environmental impact of oil usage. If a car gets 22.5 miles per ga
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. The fuel economy figures used to determine the Gas Guzzler Tax are different from the fuel economy values provided on this web site and in the Fuel Economy Guide. The tax does not depend on your 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). GAS GUZZLER TAX Unadjusted MPG (combined)* Tax at least 22.5 No tax at least 21.5, but less than 22.5 $1000 at least 20.5, but less than 21.5 $1300 at least 19.5, but less than 20.5 $1700 at least 18.5, but less than
In 1978, the US Government created the Gas Guzzler Tax as part of the Energy Tax Act. It was intended to encourage the automobile industry to design vehicles that offered better fuel economy. This move recognized the fuel shortage problem and that some vehicles consumed far more fuel than others did. The tax applies to any passenger vehicle that had a fuel economy level that didn’t match the required standards. This tax does not apply to trucks, minivans, or sport utility vehicles (SUVs). At the time the tax was created, these types of vehicles were not widely used by consumers except for commercial purposes. Any vehicle that had a fuel economy rating that was below 22.5 miles per gallon was considered taxable. This was based on a combined fuel economy rating of 55/45 percent of highway/city fuel estimates. These are different values than what the Environmental Protection Agency shows as being a vehicle’s published value. Regardless, the tax is still in effect today. The IRS is respons
