Gas Guzzler Tax
Manufacturers of new cars that fail to meet the minimum fuel
economy level of 22.5 miles per gallon (mpg) have to pay a "Gas
Guzzler Tax." The tax is intended to discourage the production and
purchase of fuel inefficient vehicles. This fact sheet explains what the
Gas Guzzler Tax is and how it is calculated.
Introduction
The Energy Tax Act of 1978 imposes a Gas Guzzler Tax on manufacturers who sell
cars that fail to meet certain statutory fuel economy levels. This tax does not apply
to minivans, sport utility vehicles, and pick-up trucks. Congress did not impose a gas
guzzler tax on these vehicle types because in 1978, at the time the law was enacted,
they represented a relatively small fraction of the overall fleet of passenger vehicles
and were used more for business purposes than personal transportation. The tax is
collected by the Internal Revenue Service (IRS) and normally paid by the manu-
facturer or importer. The amount of the tax paid is displayed on the vehicle's fuel
economy label (the window sticker on new cars).
Calculation Technique
The Gas Guzzler Tax for each vehicle is based on its combined city and highway fuel
economy value. Manufacturers must follow U.S. Environmental Protection Agency
(EPA) procedures to calculate the tax. The calculation uses a formula that weights
fuel economy test results for city and highway driving cycles (the combined value
is based on 55% city driving and 45% highway driving). Fuel economy values are
calculated before sales begin for the model year. The total amount of the tax is deter-
mined later and is based on the total number of gas guzzler vehicles that were sold
that year. It is assessed after production has ended for the model year and is paid by
the vehicle manufacturer or importer,
EPA and manufacturers use the same test to measure vehicle fuel economy for the
Gas Guzzler Tax and for new car fuel economy labels. However, the calculation pro-
cedures for tax and label purposes differ, resulting in different fuel economy values.
SEPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-F-12-068
September 2012
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This is because an adjustment factor is applied to the fuel economy test results for purposes of
the label, but not for the tax. The adjustment is intended to help account for the differences
between "real-world" and laboratory testing conditions,
EPA conducts fuel economy tests in a laboratory on a dynamometer (a device similar to a
treadmill). Laboratory conditions can be different from real world conditions for such param-
eters as vehicle speeds, acceleration rates, driving patterns, ambient temperatures, fuel type,
tire pressure, wind resistance, etc. EPA studies indicate that vehicles driven by typical drivers
under typical road conditions get approximately 70 to 90 percent of the laboratory test-based
city miles per gallon (mpg) value and approximately 70 to 80 percent of laboratory highway
mpg value. This difference is referred to as "in-use shortfall." To account for the in-use shortfall,
the city and highway mpg values listed in Fuel Economy Guide and shown on fuel economy
labels are based on fuel economy test results of the city and highway tests plus three additional
tests. The three additional tests measure fuel economy 1) at cold ambient temperatures, 2) at
warmer temperatures with the air conditioner running, and 3) when operated at high speeds and
high acceleration rates. However, the combined city and highway fuel economy that is used to
determine tax liability is not adjusted to account for in-use shortfall, so it is higher than the mpg
values provided in the Fuel Economy Guide (www.fueleconomy.gov) and posted on the window
stickers of new vehicles.
Tax Schedule
The IRS collects the tax directly from the manufacturer or importer of the vehicles. The follow-
ing table shows the gas guzzler tax rates which have been in effect since January 1, 1991. The
manufacturer or importer must pay this amount for each vehicle that doesn't meet the minimum
fuel economy level of 22.5 mpg.
Combined fuel economy of:
at least 22.5 mpg
at least 21.5, but less than 22.5 mpg
at least 20.5, but less than 21.5 mpg
at least 19.5, but less than 20.5 mpg
at least 18.5, but less than 19.5 mpg
at least 17.5, but less than 18.5 mpg
at least 16.5, but less than 17.5 mpg
at least 15.5, but less than 16.5 mpg
at least 14.5, but less than 15.5 mpg
at least 13.5, but less than 14.5 mpg
at least 12.5, but less than 13.5 mpg
less than 12.5 mpg
Amount
No tax
$1000
$1300
$1700
$2100
$2600
$3000
$3700
$4500
$5400
$6400
$7700
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Lists of Gas Guzzler Vehicles from 1980 to the current model year
Each model year, EPA identifies vehicles subject to the Gas Guzzler Tax. These lists are available
on EPA's web site at: www.epa.gov/fueleconomy/guzzler. These lists should not be construed as
"all inclusive" lists and are not intended to replace the applicable IRS or EPA regulations. The
regulations take precedence should there be any discrepancies in this information.
For More Information
You can access additional information at the following Web sites:
• Gas Guzzler Tax and Vehicles:
www.epa.gov/fueleconomy/guzzler
EPA Web site provides the lists of gas guzzler vehicles by model year,
• IRS Publication 510 - Excise Taxes:
www.irs.gov/publications/p510/ch05.html#dOe7229 (HTML)
www.irs.gov/pub/irs-pdf/p510.pdf (PDF)
Part Two, Chapter 5 - Manufacturers Taxes of this Internal Revenue
Service (IRS) publication details the payment obligations for the gas
guzzler tax. (PDF, 47 pages, 278K)
• IRS Form 6197-Gas Guzzler Tax:
www.irs.gov/pub/irs-pdf/f6197.pdf
IRS form used to calculate the gas guzzler tax. (PDF, 2 pages, 60K)
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• EPA Regulations regarding gas guzzler tax compliance:
• 40 CFR § 600.513-08 Updating label values, annual fuel
cost, Gas Guzzler Tax, and range of fuel economies for com-
parable automobiles. (PDF, 3 pp, 33K)
http://www.gpo.gov/fdsys/pkg/CFR-2011 -title40-vol30/pdf/
CFR-2011-title40-vol30-sec600-513-08.pdf
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• 40 CFR § 600.513-91 Updating label values, annual fuel
cost, Gas Guzzler Tax, and range of fuel economies for com-
parable automobiles. (PDF, 1 pg, 28K)
http://www.gpo.gov/fdsys/pkg/CFR-2011 -title40-vol30/pdf/
CFR-2011 -title40-vo!30-sec600-513-91 .pdf
Fuel Economy:
www.epa.gov/fueleconomy
EPA's web site on fuel economy provides information on how EPA
determines fuel economy estimates, the regulations that govern fuel
economy testing and reporting, and fuel economy test data.
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• Green Vehicle Guide:
www.epa.gov/greenvehicles
EPA's Green Vehicle Guide provides consumers with fuel economy
and emission information for all cars and light trucks. Consumers
can use the Green Vehicle Guide to find the cleanest, most fuel-
efficient vehicle that meets their needs. Each vehicle is given an
Air Pollution Score and Greenhouse Gas score on a scale of 0-10,
with 10 being the best. Users can look up individual vehicles or
types of vehicles to see how they rate,
• Fuel Economy Information:
www.fueleconomy.gov
This is the official site for fuel economy information, including
downloadable versions of the annual Fuel Economy Guide, files of
the annual underlying fuel economy data, as well as much more
information. Users can look up individual vehicles for specific fuel
economy information and read tips for improving gas mileage.
There are links to related sites, including where to find information
about possible tax credits for alternative fueled vehicles.
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