Sgt Al's Blog: DEAR SGT. AL: WHAT EXACTLY IS A GAS GUZZLER TAX AND WHEN DO I HAVE TO PAY IT?

DEAR SERGEANT AL: I am in the process of buying a new car, but I don’t think the dealer explained to me thoroughly what exactly a gas-guzzler tax is, how much is it, to whom, and when does it have to be paid? --ASSUMING SUMARILY SYSTEMS GO AS SOON AS TRAPPED TAXES ARE CONTROLLED KNOWLEDGEABLY

This is the only American car still in production I know of that is subject to a gas guzzler tax, a 2012 Dodge Viper. It has a massive V-10 engine, gets pitiful gas mileage at 20/12 highway/city mpg, and in this red color is on standby ready to receive a speeding ticket at a speed trap near you . . .

DEAR GAS ATTACK: Good luck with your new car purchase. From the little you tell me in your email, I can assume several things. You are NOT buying a truck or an SUV, you are instead buying a passenger car, one powered by gasoline, one that gets less than 22.5 miles per gallon combined highway/city driving according to the EPA, and because of the gas mileage, mostly likely you are purchasing an expensive one. To my knowledge, unless it is the 2012 Dodge Viper you’re buying, the only American car currently in production with a gas-guzzler tax sold new this year, then I’m also going to assume that this is instead a new foreign car, most likely a premium brand, possibly an exotic.

If you click on this picture to look more closely at this Mulroney price sticker attached to this 2010 Rolls Royce Ghost, you plainly see that the Gas Guzzler Tax has already been included.

If this is all correct, the National Energy Act, also known as the Gas-Guzzler tax, is a federal excise tax signed into law in 1978 by President Carter, still in effect, imposed at the time of sale, based on a formula which includes the car’s actual gas mileage, imposed on cars and not trucks, and paid by the manufacturer but passed on to the buyer. It is included in the Mulroney price sticker in the side window of your new car and is included in the manufacturers suggested retail price when the car is sold at the showroom. Next time you’re there, take a look at the sticker or the invoice; it’s already included in the price. The manufacturer will pay it along with the sales taxes for you when the sale is completed. You need not worry about reporting this to the IRS.

This diagram is usually included on the window sticker when a gas guzzler tax is imposed.

If you are buying an expensive premium or exotic auto, one tax you might have to consider however, is a luxury tax. Although the feds ditched theirs in 2003, some states may still impose a luxury tax on your car if it is priced over a certain amount. Check with the dealer and make sure you tell them in which state will the car be registered. A knowledgeable finance guy or gal at the dealer should know the ins and outs of these taxes on cars. If they are not sure (and believe it or not they actually may not know for sure since most dealers don’t often sell as many $150,000+ cars as they do less expensive ones across state lines unless they sell exotics), don’t take any chances and call either your state’s DMV or Taxation Department offices to find out yourself. It can range anywhere from around 5-33% so this is an important aspect as to whether you can afford to buy the car, or if you prefer to finance, how much you’re willing to pay in monthly payments. This website has a pretty good luxury tax calculator to figure out what the total cost of your new car will be once you know what the tax is.

If you insist on buying expensive and gawdy, one option to avoid the gas guzzler tax is to wait for Rolls Royce to produce its electric plug-in Phantom. It's still in the prototype phase.

I’m familiar with the DMV aspects of such a sale, but don’t take any chances and let me cover myself by suggesting you talk to either an accountant, tax attorney, the DMV, or your state’s taxation and finance departments to find out if there are any other hidden charges to your new luxury gas guzzling car purchase. To avoid most of these taxes, my suggestion to anyone in the car market looking for these types of cars has always been that when buying an expensive premium auto to instead try to buy a late model used car (MANUFACTURER PRE-CERTIFIED and NOT JUST DEALER PRE-CERTIFIED pre-owned) from a new car dealer. Luxury bespoke car makers like Rolls Royce or Bentley like to sell late model pre-owned cars with new car warranties starting with the odometer mileage at the time of SALE, NOT NECESSARILY at mile zero, a definite benefit to the used car buyer. So, GAS ATTACK, you are WARNED: buying a late model used car instead will enable a greater chance of you to avoid having to pay some of if not all of these extra taxes, and you save a ton of money on the sale and in depreciation. Remember this: any car that is sold new with either a gas guzzler or luxury tax substantially and proportionately depreciates much faster in value than cars that are way less cheaper and more economical. This is common sense. Like their ocean faring counterparts, land yachts are a better value when purchased used than brand new. Oh, GAS ATTACK, you gas pig you! Good luck warming and stinking up the planet with your noxious exhaust emissions! Enjoy in good green health and safe driving in your new gas-guzzling car!

Read Part 3 of my series on driving flashy cars . . .

P.S. TO GAS ATTACK: If I haven’t discouraged you at all from buying this car, may I suggest you click here and first read PART 3 of my first series on driving flashy cars and getting a traffic ticket. If you still wish to ignore me, once your car is out on the road, may I suggest you read all of my 12 part series on HOW TO AVOID OR FIGHT A TRAFFIC TICKET, start here with PART 1. I have a feeling you’ll be coming back to me one way, or another soon. Just remember I take cash, check, or all major credit cards for your inevitable violation. YOUR HUMBLE CIVIL SERVANT, SGT. AL

MY DEAR READERS: As a police officer I do not discriminate. I try to help one and all. Today I helped out the 1% rich global warming gas pigs on the planet. TOMORROW FOR ALL THE REST OF YOU 99% ECONOMICAL AND ECOLOGICAL PRIUS LOVING GREEN TREE HUGGING GREENPEACE DRIVERS, I answer this opposite question: Is it worth buying an all-electric plug-in car this year? I love you all. Safe driving!

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