What Is a Gas Guzzler TaxThe gas guzzler tax is a federal excise tax the US government applies to new passenger cars that fall below a minimum combined fuel economy threshold, intended to discourage the sale of especially fuel inefficient vehicles. It is paid by the manufacturer or importer at the time of sale and gets built into the vehicle's price rather than charged separately to the buyer at the pump or at registration.Which Vehicles Are Actually AffectedThis tax applies only to passenger cars, not trucks, SUVs, or minivans, which is a long standing gap in how the rule was written decades ago. As a result, a fuel inefficient large SUV generally avoids this tax entirely, while a low MPG sports car or luxury sedan falling below the threshold does not.
The further below the fuel economy threshold a car falls, the higher the tax tier it lands in.How the Tax Scales With Fuel EconomyThe tax is structured in tiers, so a car that barely misses the minimum combined fuel economy threshold owes a relatively small amount, while a car that falls far below it owes considerably more. This tiered structure means the tax mainly targets vehicles at the extreme low end of fuel efficiency rather than catching anything close to an average passenger car, which is part of why most buyers never encounter it directly in everyday car shopping.Why This Tax Rarely Comes Up AnymoreModern passenger cars have become efficient enough that most easily clear the minimum threshold without issue, so the tax today mainly affects a small number of high performance sports cars and certain luxury vehicles rather than ordinary commuter cars. If fuel efficiency is a priority in your next purchase regardless of this tax, the High MPG Cars Under $25,000 guide is a more practical starting point than worrying about gas guzzler status.Curious what a more efficient vehicle would actually save you?
Try the Fuel Savings Calculator.
Frequently Asked Questions
Does the gas guzzler tax apply to trucks and SUVs?
No. The tax applies only to passenger cars under current rules, which means most trucks, SUVs, and minivans are exempt regardless of their fuel economy.
Do electric vehicles pay a gas guzzler tax?
No. The tax is based on combined city and highway MPG from a gasoline powered testing cycle, so fully electric vehicles are not subject to it.
Who actually pays this tax?
The manufacturer or importer pays it at the time of sale, and the cost is generally reflected in the vehicle's overall price rather than appearing as a separate line item to the buyer.
Has the gas guzzler tax changed much over time?
The underlying structure has remained largely the same for years, though improvements in vehicle efficiency mean fewer models qualify for it today than when it was first introduced.