What is the Gas Guzzler Tax?
Vehicles that get less than 22.5 miles per gallon are subject to the gas guzzler tax.
Written by Kaitlin May
Reviewed by Jessica Barrett
Vehicles that fail to meet federal minimum fuel efficiency standards are subject to the gas guzzler tax. Since the debut of the Energy Tax Act of 1978, vehicles that get less than 22.5 miles per gallon have had to compensate for their faulty fuel economies.
The law intended to incentivize both car manufacturers and buyers to be more cognizant of their fuel consumption, but its outdated origins have brought about complications for everyone affected. Although you won’t be responsible for footing the gas-guzzling bill directly, you’ll be paying for a pricier line item on your new vehicle’s receipt.
If you’re in the market for a new car or have become wise to the gas-guzzling tendencies of your current one, the
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comparison app Jerry
has all the details on the gas guzzler tax. We’ll cover everything from what the tax means, which vehicles it applies to, and how to find an affordable car insurance policy to offset its taxing costs.
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Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars4.7/5 app rating | Trusted by 5M+ driversWhat is the gas guzzler tax?
Any vehicle with poor fuel economy is considered a gas guzzler. The gas guzzler tax is a surcharge applied to sales and lease prices of vehicles that get less than 22.5 miles per gallon (mpg).
This additional fee isn’t something you’ll handle directly—it’s paid by manufacturers and importers of vehicles that don’t meet federal fuel efficiency standards. Although the gas guzzler tax is tacked on to passenger cars, it doesn’t affect trucks, utility vehicles, or minivans.
The outdated establishment of the law back in 1978 inadvertently exempted these vehicles from the regulations since they weren’t used as passenger vehicles at the time. The Energy Tax Act of 1978 intended to curtail the spread of vehicles that consumed too much fuel.
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How does the gas guzzler tax affect drivers?
With gas prices at an all-time high, you’ll want to pay attention to the window stickers on the vehicles you’re considering buying or leasing. While you won’t directly be responsible for paying the gas guzzler tax, it will hike up the price of certain vehicles at the dealership.
- If a car gets at least 22.5 mpg in combined city and highway driving, you won’t have to worry about the gas guzzler tax
- If it gets less than 22.5 mpg, the vehicle will be taxed $1,000
- If it gets less than 12.5 mpg, it’s going to max out on the gas guzzler tax with a $7,700 surcharge
At the end of the production year, the tax is reported on the
Internal Revenue Service (IRS) Form 6197
.MORE:
How to track gas mileage
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Which vehicles qualify for the gas guzzler tax?
Unless you’re in the market for a luxury sports car, you’ll most likely be safe from the gas guzzler tax. In 2016, the EPA established a
list of gas guzzlers
.Most of the cars listed aren’t budget-friendly, since high-end models tend to consume the most gas. These include:
MORE: Experts ruled Corvette the best luxury sports car
Which vehicles are not included in the gas guzzler tax?
Lucky for manufacturers, there are some loopholes in the gas guzzler tax when it comes to trucks, minivans, and SUVs. The law passed in 1978 was ahead of the SUV’s time, though it’s become America’s most popular vehicle in the years since.
With the introduction of the Jeep Cherokee XJ in 1984, Americans met their first SUV and fell head over heels for it. Manufacturers caught on to the growing preference for trucks and SUVs over standard passenger cars and produced more of them to skate around the gas guzzler tax.
Here are some popular models that aren’t subject to higher, gas-guzzling price tags:
Key Takeaway America’s most popular vehicles like SUVs, trucks, and minivans are typically exempt from the gas guzzler tax—while high-end, luxury models are notoriously subject to it.
How much does the gas guzzler tax cost?
While you won’t be receiving a bill for the gas guzzler tax in the mail, vehicle manufacturers and importers will factor the tax into purchase prices at the dealership. Each vehicle’s unique fuel economy will determine the amount of the tax, but it ranges from $1,000 to $7,700.
How to find cheap car insurance with a gas-guzzling vehicle
If you’re planning to buy or lease a sleek Aston Martin or a classic Corvette, you won’t just be paying the big bucks for their fuel economy. Car insurance for high-end or
classic cars
is inherently expensive, but with Jerry
it doesn’t have to be.No matter what car you drive, comparison shopping is the key to finding affordable insurance rates. The good news is you won’t have to make a time-guzzling phone call to unlock access to the most competitive quotes. Once you download the
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What vehicles have a gas guzzler tax?
Any vehicles that get less than 22.5 mpg have a gas guzzler tax. Examples include Aston Martin, BMW, Ferrari, Rolls-Royce, Chevrolet Corvette, and Ford Mustang.
How do I avoid the gas guzzler tax?
SUVs, minivans, and trucks are not included in the gas guzzler tax since they weren’t considered passenger vehicles when the Energy Tax Act of 1978 was passed. Otherwise, vehicles with a 22.5 mpg or greater fuel economy will be exempt from the tax.
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