The Gas Guzzler Tax is a Federal excise tax applied to the domestic sale of new vehicles that don't meet certain fuel economy standards. It was enacted as part of the Energy Tax Act of 1978, reaching current levels by 1988. On its surface, the Tax is simple. Behind that simplicity, though, lies a maze of formulas and numbers, some of which are of particular interest to SUV buyers.
Combined Fuel Economy
The Gas Guzzler Tax is based on combined fuel economy, which is based on a 55%/45% highway/city fuel economy estimate from the Environmental Protection Agency test.
How Much is the Gas Guzzler Tax?
Vehicles that get at least 22.5 mpg (combined) don't have to pay the Gas Guzzler Tax. The Tax rate goes from $1,000 for vehicles that get at least 21.5 mpg (combined), but less than 22.5 mpg (combined) all the way up to $7,700 for vehicles that get less than 12.5 mpg (combined).
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