Gas Guzzler Tax is a federal excise tax charged on new passenger cars that fall below the government’s minimum fuel economy threshold. If the car you’re buying doesn’t hit 22.5 mpg combined, the manufacturer pays this tax and almost always passes that cost straight to you as a line item on the window sticker. The Energy Tax Act of 1978 first introduced these provisions specifically to push automakers away from building fuel-inefficient vehicles. Nearly five decades later, the rules haven’t changed much, but the cars on the list certainly have. We’ll cover how the tax is calculated, which 2025 cars are still affected, which vehicles are exempt and what you can do to keep your overall car ownership costs manageable.
What Is the Gas Guzzler tax?
The Gas Guzzler Tax is a federal excise tax assessed on new cars that don’t meet required fuel economy levels set by the Environmental Protection Agency (EPA). The tax applies only to passenger cars. Trucks, minivans and SUVs are not covered. More on that below.
When a new car triggers the GGT, either the manufacturer or the importer is the one officially responsible for paying it. But that doesn’t mean buyers escape the cost. It’s usually folded straight into the vehicle’s sticker price. You’ll even see it listed on the Monroney label under the EPA fuel economy section. So no, you’re not sending money directly to the IRS. Still, you’re paying for the tax the moment you buy the car.
The tax can be as little as $1,000 or climb all the way to $7,700. It depends on one thing: just how badly the vehicle misses the federal fuel economy threshold. The worse the MPG numbers, the steeper the penalty tends to get.
On paper, the process is surprisingly bureaucratic. Manufacturers report and pay the charge using IRS Form 6197, better known as the Gas Guzzler Tax form. That filing is then submitted alongside Form 720, the federal excise tax return used for a range of industry taxes.
Quick fact: The Gas Guzzler Tax schedule has not been updated since 1991, even though fuel standards and vehicle technology have changed substantially since then.
What cars are considered Gas Guzzlers?
The term “gas guzzler” is used broadly to describe cars with comparatively poor miles per gallon (mpg). Vehicles that tend to land on this list share a few common traits:
- Large displacement engines: V8, V10, or V12 configurations, plus models with superchargers or turbochargers tuned for performance over efficiency
- Less aerodynamic body shapes that create more drag, forcing the engine to work harder at highway speeds
- High-performance sports cars and luxury sedans where power output is the main selling point
These aren’t your everyday commuters. We’re mostly talking about Ferraris and Lamborghinis, along with a handful of high-performance American muscle cars.
How the gas guzzler tax works
The Gas Guzzler Tax is calculated based on a car’s combined city and highway fuel efficiency, measured using the older EPA 2-cycle test method. A car must exceed 22.5 mpg on this older test to avoid the tax entirely.
Here’s something a lot of buyers miss: the mpg number on your car’s window sticker comes from the EPA’s newer 5-cycle test, which accounts for faster highway speeds, air conditioning use and cold-weather starts. The GGT calculation uses the older, more lenient 2-cycle method, which produces higher MPG numbers. This is why some cars showing less than 22.5 mpg on their sticker don’t actually owe any gas guzzler tax. The Audi S8 (18 mpg sticker), the Chevy Corvette (19 mpg sticker) and the Nissan Z with a manual transmission (20 mpg sticker) are real examples of cars that dodge the tax because their 2-cycle numbers clear the threshold.
Every year, before sales begin, each automaker calculates its vehicles’ fuel efficiency ratings and determines the tax owed for each qualifying model. The manufacturer pays the total tax after each model year’s production cycle closes.
Gas Guzzler Tax rate schedule (combined MPG, 2-Cycle method)
| Combined MPG | Tax Amount |
| Less than 12.5 | $7,700 |
| 12.5 – 13.5 | $6,400 |
| 13.5 – 14.5 | $5,400 |
| 14.5 – 15.5 | $4,500 |
| 15.5 – 16.5 | $3,700 |
| 16.5 – 17.5 | $3,000 |
| 17.5 – 18.5 | $2,600 |
| 18.5 – 19.5 | $2,100 |
| 19.5 – 20.5 | $1,700 |
| 20.5 – 21.5 | $1,300 |
| 21.5 – 22.5 | $1,000 |
| 22.5 or above | No Tax |
This schedule has been fixed since 1991. No adjustments for inflation, no changes to reflect modern performance vehicles, nothing. That’s part of why the GGT has become less effective at discouraging purchases. A $7,700 tax on a $300,000 Ferrari barely registers.
Gas Guzzler Tax-affected cars in 2025
According to the EPA’s 2025 Fuel Economy Guide, 30 car models across 13 manufacturers are currently subject to the Gas Guzzler Tax. That number has dropped significantly. As recently as 2023, close to 70 models qualified. Cleaner engine technology and platform redesigns have removed a lot of cars from the list.
The tax is almost entirely concentrated in the luxury and exotic performance segment:
| Manufacturer | Taxed Models (2025) |
| Ferrari | 7 |
| Porsche | 4 |
| Chevrolet | 3 |
| Mercedes-Benz | 3 |
| Ford | 3 |
| Bugatti | 1 |
| BMW | 1 |
| Lamborghini | 1 |
To check whether a specific vehicle is subject to the tax, go to fueleconomy.gov, look up your model, click the “Specs” tab and scroll to see if the gas guzzler tax is listed. You can also look at the EPA fuel economy section on the Monroney label at the dealership.
Vehicles Exempt from the Gas Guzzler Tax
Here’s where the law shows its age most clearly. SUVs, pickup trucks and minivans are entirely exempt from the Gas Guzzler Tax. Not because they’re fuel-efficient, but because those vehicle categories barely existed as consumer products when Congress wrote the law in 1978. Pickup trucks were considered work vehicles. The SUV as a family hauler didn’t exist yet.
The result is that some of the least fuel-efficient vehicles on the road today face no GGT whatsoever. Popular models like the Subaru Forester, Mazda CX-5, Chevrolet Equinox, Ford Explorer and Jeep Wrangler avoid the tax entirely because they’re classified as light trucks or SUVs, regardless of their mpg.
Electric and hybrid vehicles are also exempt. Because they either consume no gasoline or consume very little, they fall outside the scope of the tax by design. As EVs and plug-in hybrids take up a larger share of new car sales, the total number of GGT-eligible models will likely keep shrinking.
How to check if your car has the Gas Guzzler Tax
Before you sign anything at a dealership, here’s how to check:
- Look at the Monroney label. The official window sticker on every new car includes an EPA fuel economy section. If the vehicle is subject to the Gas Guzzler Tax, the tax amount will be listed there.
- Use the EPA’s Fuel Economy Guide at fueleconomy.gov. Search for your model, click the Specs tab and look for the gas guzzler tax notation.
- Check the vehicle’s combined MPG. If the sticker shows less than 16 mpg (roughly equivalent to 22.5 mpg on the older test), there’s a decent chance the car carries the tax.
What the Gas Guzzler Tax means for your wallet
You don’t pay the Gas Guzzler Tax directly to the IRS. Most people don’t even notice it. The tax is already added to the car’s price before it gets to the dealership.
That means the car costs more from the start. If you take a loan, your monthly payments can be higher too. In some states, registration fees also go up because they are based on the car’s value.
Later, when you sell the car, it may lose value faster because you paid more for it in the first place.
So even though it appears as just another line item on paper, the tax has a habit of following the car throughout its ownership life.
If you’re already driving a fuel-inefficient car, the bigger ongoing cost is fuel itself. Vehicles with 15 mpg or less can cost hundreds of dollars more per year in gas compared to a car averaging 30 mpg, depending on your annual mileage.
Tools like the Way app let you track your mileage, find better insurance rates and get cashback on gas purchases. Practical ways to offset the higher running costs of a less efficient vehicle without changing what you drive.
Frequently asked questions about the Gas Guzzler Tax
What is the Gas Guzzler Tax?
The Gas Guzzler Tax is a federal excise tax applied to new passenger cars that fail to meet the EPA’s minimum fuel economy standard of 22.5 mpg (measured by the older 2-cycle test). It was established under the Energy Tax Act of 1978 and is still in effect today.
Who pays the Gas Guzzler Tax?
Technically, the manufacturer or importer pays it. In practice, the cost is almost always passed on to the buyer as part of the vehicle’s sticker price. You’ll see the exact tax amount listed on the car’s Monroney label.
How much is the Gas Guzzler Tax?
It can vary from $1,000 to $7,700 depending on the vehicle’s fuel efficiency. If the car has a lower mpg, the tax will be high. The maximum $7,700 applies to cars rated below 12.5 mpg on the 2-cycle test.
Which cars are subject to the Gas Guzzler Tax in 2025?
30 models from 13 manufacturers currently carry the Gas Guzzler Tax, according to the 2025 EPA Fuel Economy Guide. They’re mostly exotic and high-performance vehicles: Ferrari, Lamborghini, Bugatti, Porsche, along with a few performance variants from Chevrolet, Ford, Mercedes-Benz and BMW.
Are SUVs and trucks exempt from the Gas Guzzler Tax?
Yes. The tax applies only to passenger cars. SUVs, pickup trucks and minivans are excluded under the original 1978 law because those vehicle types were not considered standard consumer vehicles at the time the legislation was written.
Are electric vehicles exempt from the Gas Guzzler Tax?
Yes. Electric vehicles and most hybrid vehicles are exempt because they either don’t consume gasoline or consume far less than conventional cars. They easily clear the fuel economy threshold and EVs don’t have a mpg rating in the traditional sense.
Why do some low-mpg cars avoid the Gas Guzzler Tax?
The Gas Guzzler Tax uses an older EPA fuel economy test called the 2-cycle test. This older test usually gives cars better mpg numbers than the newer 5-cycle test shown on window stickers.
For example, a car may show 19 mpg on the sticker at the dealership. But under the older 2-cycle test, it could score 23 mpg instead. That higher score may help the car avoid the Gas Guzzler Tax.
Has the Gas Guzzler Tax rate ever changed?
No. The rate schedule has been frozen since 1991. The tax brackets and dollar amounts have not been adjusted for inflation or updated to reflect changes in vehicle technology.
What IRS form is used for the Gas Guzzler Tax?
Manufacturers and importers report the Gas Guzzler Tax using IRS Form 6197, which is attached to Form 720 (Quarterly Federal Excise Tax Return). The tax is filed quarterly, with deadlines on April 30, July 31, October 31 and January 31.
Does the Gas Guzzler Tax apply to used cars?
No. The Gas Guzzler Tax only applies to new passenger cars at the point of their first sale or import. Once a vehicle is sold, the tax obligation does not carry over to resales.
Can I get a refund on the Gas Guzzler Tax?
In limited cases, yes. If the manufacturer paid the tax on a vehicle that is later used or resold for a qualifying emergency use, the manufacturer may be eligible for a credit or refund under IRS Publication 510.
Is the Gas Guzzler Tax going away?
There’s been ongoing discussion about updating or expanding it, especially given that the current exemptions cover SUVs and trucks, which now make up over 50% of all new vehicle sales in the US. As of 2025, no legislative changes have been enacted.
Aaron Marshall grew up in a house where cars were never just transportation. Weekend projects, road trips, heated opinions on engine specs at dinner. That stuff never left him. He joined Way in 2023 and has been writing about cars and what it actually costs to own one ever since.
