Regulations

Time to Oppose Gas Guzzler Gouging!

Posted on May 1, 1991 by Scott Fletcher, LCT editor

Confusion surrounds both the gas guzzler penalty and the luxury tax which have been in effect since the first of the year.  First, the luxury tax does not apply to a limousine purchased for commercial use.  If you are buying a limousine for personal use, expect to pay a luxury tax of 10 percent on the amount of the purchase price above $30,000.

Since the first of the year, however, both commercial and private limousines are subject to a gas guzzler penalty.  Here is my understanding of a few key points (thanks to Jerry Loftus of LIMO and Jeffrey Berger of Shawn, Berger & Mann in Washington, D.C.)…

Who is liable for this penalty?

The owner of the vehicle at the time it is converted into a limousine is generally considered the “manufacturer” and is liable for the penalty.

How much is the penalty?

The tax table (See January/February 1991 L&C, page 48) is based on mileage and affects every new vehicle getting less than 22 miles per gallon.

How is mileage determined?

Cadillac and Lincoln are preparing estimates which might eventually be accepted by the EPA as the government standards for limousine mileage.  Lincoln has tentatively announced a figure of 19.1 MPG (19.7 in CA) for Town Car stretches up to 75 inches and 7100 pounds.  This brings a penalty of $2100 ($1700 in CA).  A higher mileage estimate for longer limousines, which will result in greater penalties, is being developed.

Cadillac has not yet announced its mileage estimates so it is up to the coachbuilder or limousine owner to determine the mileage and the tax, or risk the maximum penalty of $7,700.  The price sticker on a Brougham shows that Cadillac pays a gas guzzler penalty on each vehicle.  This can be deducted from the amount shown in the tax table.

Does the penalty also apply to the conversion of used base units?

Yes.  Since the law does not distinguish between new and used vehicles, every limousine conversion is subject to the penalty according to its mileage.  If a coachbuilder converts a privately owned vehicle, for example, the owner would become responsible for reporting and paying the penalty.  In this respect, the gas guzzler penalty is self-enforcing.  By auditing coachbuilders, however, the IRS could identify the owners of vehicles for collection of the penalty.

Can anything be done to repeal this penalty?

In 1986, the NLA, in cooperative with Srmbruster/Stageway, American Custom Coach, Gaines, Eureka, DaBryan Coach, Empire Coach, Tri-State, and Allen Coachworks, mounted a lobbying campaign costing $38,000.  The result was a total exemption for limousines from the gas guzzler tax.  Attorney Jeffrey Berger, who led that effort, feels some relief may be possible this year as well.

“A major concern,” says Berger, “is that gas guzzler rates doubled this year and will likely increase again.  You can’t just sit there and swallow this because it might get even worse.”

In our opinion, the limousine industry should ask Congress to exempt commercial limousines from the gas guzzler penalty as they did from the luxury tax.  No other form of commercial transportation is subject to a gas guzzler penalty.

An additional $2100 per limousine is not only a burden on the limousine industry; it is likely to become an unfair advantage for limousine owners who, through ignorance or cunning, fail to comply.  We urge you contact the NLA or LIMO and support the creation of a gas guzzler exemption for commercial limousines.

 

View comments or post a comment on this story. (0 Comments)

More News

Stretch Limo Emergency Exit Rules Now In Effect

The California law starts this month for new limos and January 2016 for existing vehicles.

California Sets High Standard With New TNC Insurance Rules

Analysis: TNC drivers now must have full coverage from the moment they turn on the on-demand apps.

Stronger TNC Driver Insurance Policies Still Leave Gaps

Insurers are starting to offer better policies here and there, but most states only have one or few options.

Atlantic City Seeks Fair Rules For Limos, Taxis, TNCs

Even a short time spent with city inspectors or industry operators shows how difficult making a system the norm will be.

Taxi Protests Against TNCs Erupt In Miami

Cabs drove one lap after another around the city block that County Hall occupies in downtown Miami. 

See More News

Post a Comment

Submit

Comments (0)

Blogs

See More

See More

See More

See More

LCT Store

LCT Magazine - July 2015 $12.95 COVER STORY: * Gateway To Golden Opportunities * What do Big Travel Buyers Expect from Your Service?

Connect

Experience the three annual industry events for networking for business, showcasing vehicles and products, and getting the tools for success.

Read About Your Region

What’s Happening Near You?
Click on any state to see the latest industry news and events in that region.

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The resource for managers of class 1-7 truck Fleets

Metro Magazine

Serving the bus and passenger rail industries for more than a century

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

Please sign in or register to .    Close