Office of Transportation EPA420-F-06-042 

and Air Quality October 2006 

Program

Overview

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 978 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 978, 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 is normally paid by 

the manufacturer 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 

determined 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 procedures for tax and label purposes differ, 

resulting in different fuel economy values. 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 parameters 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 90 

percent of the laboratory test-based city mpg value and approximately 

78 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 the Fuel Economy Guide and shown on 

fuel economy labels are multiplied by 0.90 for the city test and 0.78 for 

the highway test. 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 following table shows the gas guzzler tax rates which 

have been in effect since January , 99. The manufacturer or importer 

must pay this amount for each vehicle that doesn’t meet the minimum 

fuel economy level of .5 mpg. 


Combined fuel economy of: Amount 

at least .5 mpg No tax 

at least .5, but less than .5 mpg $000 

at least 0.5, but less than .5 mpg $00 

at least 9.5, but less than 0.5 mpg $700 

at least 8.5, but less than 9.5 mpg $00 

at least 7.5, but less than 8.5 mpg $600 

at least 6.5, but less than 7.5 mpg $000 

at least 5.5, but less than 6.5 mpg $700 

at least 4.5, but less than 5.5 mpg $4500 

at least .5, but less than 4.5 mpg $5400 

at least .5, but less than .5 mpg $6400 

less than .5 mpg $7700 

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 for 2005: 

www.irs.gov/publications/p50/ar0.html#d0e548 (HTML) 

www.irs.gov/pub/irs-pdf/p50.pdf (PDF)

Part Two, Chapter 5 - Manufacturers Taxes of this Internal Revenue 

Service (IRS) publication details the payment obligations for the gas 

guzzler tax.


● IRS Form 6197 – Gas Guzzler Tax: 

www.irs.gov/pub/irs-pdf/f697.pdf 

IRS form used to calculate the gas guzzler tax. 

● EPA Regulations regarding gas guzzler tax compliance: 

○ 40 CFR § 600.4–0 Updating label values, annual fuel cost, 

Gas Guzzler Tax, and range of fuel economies for comparable 

automobiles. (PDF,  pages, K) = http://a57.g.akamaitech. 

net/7/57/4/08aug005500/edocket.access.gpo.gov/cfr_ 

005/julqtr/pdf/40cfr600.4-0.pdf 

○ 40 CFR § 600.4–86 Updating label values, annual fuel cost, 

Gas Guzzler Tax, and range of fuel economies for comparable 

automobiles. (PDF,  page, 8K) = http://a57.g.akamaitech. 

net/7/57/4/08aug005500/edocket.access.gpo.gov/cfr_ 

005/julqtr/pdf/40cfr600.4-86.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. 

● 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 fuelefficient vehicle that meets their needs. Each vehicle is given an Air 

Pollution Score and Greenhouse Gas score on a scale of 0-0, with 

0 being the best. Users can look up individual vehicles or types of 

vehicles to see how they rate. 

● www.fueleconomy.gov 

www.fueleconomy.gov 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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