What Is Gas Guzzler Tax?
The Gas Guzzler Tax and the Fuel Economy Guide
The gas guzzler tax is added to the price of cars that have poor fuel economy ratings. The tax is paid by the manufacturer or importer of the vehicle and can range from $1,000 to $7,700. The majority of the cars are high-end and sports cars.
The Chevrolet Corvette and Ford Mustang are two American muscle cars that were on the list. The Fuel Economy Guide is published by the U.S. government every model year. The EPA requires that manufacturers use the same test when they measure fuel economy for new cars and gas tax.
The calculation procedures are different. The EPA says that the adjustment factor is applied to the fuel economy test results for the purposes of the label, but not for the tax. 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 and posted on the window stickers of new vehicles.
The Fuel Economy in the City and Highway
The fuel economy is calculated using a formula that takes city driving and highway driving into account. The number of gas-guzzler vehicles sold in a particular year is what determines it. Cars that get less than 22.5 miles per gallon are taxed.
A Tax on Vehicles with Poor Fuel Economy
There is an additional tax on the sale of vehicles that have poor fuel economy. The gas guzzler tax was established by the Energy Tax Act of 1978 to encourage the use of more fuel efficient vehicles. The gas tax is applied to passenger cars, trucks, minivans and SUVs.
The Gas Tax Threshold in Modern Car Production
Modern vehicles are more efficient and eco-friendly than they used to be. The limited supply of fossil fuels and the worsening air quality of the past gave cars a week to burn through a tank of gasoline. In 1978 the gas tax impacted many passenger cars, but over time fewer and fewer models fell below the threshold. The modern models subject to the gas tax are all high- performance sports cars from European luxury brands.
The State Gas Tax is $3.06 cents a Gallon
The federal gas tax has been at 18.4 cents a gallon since 1993, but the increasing squeeze on transportation budgets has led many states to raise the gas tax in recent years. Tax hikes have been imposed in 36 states since 2010, and taxes in Alabama and Washington, D.C., are set to increase in October. The average state gas tax is 30.06 cents per gallon, when you add up all the taxes and fees, as of the beginning of 2021, according to the U.S. Energy Information Administration.
Diesels in Light Truck Production
Diesel technology is used in light trucks in Japan and Europe. The diesel fuel's bad reputation and poor quality have led to the rarity of such vehicles in the US market. Most modern diesel engines have particulate filters, which have been used to cut back on diesel engine particle emissions.
The Gas Guzzler Tax and Luxury Models
Many of the vehicles subject to the Gas Guzzler Tax are luxury models. Mainstream cars are efficient enough to avoid tax.
X Cancel
