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Gas Guzzler Tax

Last updated 29th Nov 2022


The term Gas Guzzler Tax is used to describe a tax paid by manufacturers when a new car fails to meet minimum fuel economy threshold values. The Gas Guzzler provisions found in the Energy Tax Act of 1978 were meant to discourage both the production as well as the purchase of fuel-inefficient cars, minivans, trucks, and sports utility vehicles.


As part of the Energy Tax Act of 1978, manufacturers of vehicles that did not achieve at least 22.5 miles per gallon of gasoline (MPG) according to procedures outlined by the U.S. Environmental Protection must pay a Gas Guzzler Tax. The calculation uses a weighted average fuel economy of highway (45%) and city (55%) driving.

The fuel economy values are determined before sales of the vehicle occur, and the tax is paid by the manufacturer to the Internal Revenue Service (IRS) for each vehicle that does not meet the 22.5 MPG threshold value. The Gas Guzzler Tax assessed on each vehicle will appear on the window stickers of new cars and is meant to discourage the purchase of these vehicles. The lower the fuel economy of the vehicle, the higher the tax as shown in the table below:

Vehicle Fuel EconomyGas Guzzler Tax22.5 MPG or more$0At least 21.5 MPG, but less than 22.5 MPG$1,000At least 20.5 MPG, but less than 21.5 MPG$1,300At least 19.5 MPG, but less than 20.5 MPG$1,700At least 18.5 MPG, but less than 19.5 MPG$2,100At least 17.5 MPG, but less than 18.5 MPG$2,600At least 16.5 MPG, but less than 17.5 MPG$3,000At least 15.5 MPG, but less than 16.5 MPG$3,700At least 14.5 MPG, but less than 15.5 MPG$4,500At least 13.5 MPG, but less than 14.5 MPG$5,400At least 12.5 MPG, but less than 13.5 MPG$6,400Less than 12.5 MPG$7,700

The manufacturers of gas guzzling vehicles include: Aston Martin, Audi, Bentley, BMW, Bugatti, Chrysler, Ferrari, General Motors, Lamborghini, Maserati, Mercedes-Benz, and Rolls-Royce.

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Moneyzine Editor

Moneyzine Editor