If you are shopping for a higher end vehicle you might notice a very expensive line item on the Window Sticker you have never seen before. The Gas Guzzler Tax was enacted in 1978 as part of the larger Energy Tax Act and it penalizes a buyer who chooses to purchase a vehicle knowing that it does not meet certain fuel efficiency standards. This is the opposite of the Electric Vehicles tax credit which gives you back up to 10% of your vehicle’s current value.

The Gas Guzzler calculation of efficiency changes from year to year based on EPA testing but a good rule of thumb is if your vehicle will be getting less than 22.5 MPG you will most likely be paying the tax. The actual amount of the tax also changes depending on how much below that 22.5 MPG value the cars is. If you are close to it, it can be as little as $1,000 but if you are at 12.5 MPG or lower, expect to pay an extra $7,700.

There are simple ways to avoid this tax and help the environment while you can purchase the vehicle you want. Take a look at the Chrysler 300 which comes in 6 different models. Only the SRT8 which comes with a 6.1 Liter engine is subject to the tax because of it’s 18 MPG rating. That is an extra $2,100 you are paying over the next lower model which has a 22 MPG rating and no Gas Guzzler Tax.

At this time, SUVs are not subject to this tax. So even though the Lexus GX-470 gets only 18 MPG you would not have to pay the additional $2,100 in the Gas Guzzler tax. However, legislation will be moving through congress to change the definition of an SUV from a light truck to a car which would then make it subject to the Gas Guzzler tax.