European Stars And Stripes (Newspaper) - February 28, 1986, Darmstadt, Hesse                                Friday february 28, 1986 the stars and stripes Page 3 mileage tax hits Gray market7 by Clint Swift Washington Bureau Washington a Gas guzzler tax ranging up to $3,850 in 1986 must be paid on Gray Market foreign cars imported into the United states the internal reve nue service has ruled. The ruling applies to cars imported since 1980 and states that cars for which no environmental Protection Agency fuel Economy figure exists will be assumed to get the lowest mileage for tax purposes. That Means people who have imported such cars Are liable for a tax of from $550 for a 1980 Model to $2.650 for a 1985 Model. Anyone bringing Back a 1986 Model with no Epa accepted mileage figure would be liable for $3,850 in tax. Owners who believe their cars get better mileage than that of the lowest category 12.5 Miles per gallon in 1986 can have their cars tested. The ruling published in the feb. 18 Issue of the inter Nal Revenue bulletin says in the Case of a car brought Back for personal use the owner is liable for the tax. Inthe Case of autos brought Back for resale the importing firm must pay the tax. An irs staffer in the procedures and examination Section said even if the car had been sold the person or firm that imported it is still liable for the tax. The Epa waives emission requirements on some cars at least 5 years old but the ruling states there is no exemption from the tax. The automobile importers compliance association which represents firms that import Gray Market cars announced that its Law firm will organize a lawsuit challenging the ruling if enough owners and importers will support the Effort with funds. Alca s View is that irs cannot impose the Gas guzzler tax until Epa establishes specific test procedures for direct imports or generates fuel Economy ratings applicable to direct imports spokesman Joe Normandy said. Epa has. Conceded this Point by indicating that one objective of its current Rule making proceeding is to establish testing proce dures for Gas guzzler tax  the Gray Market involves vehicles shipped to the United states before they meet . Transportation depart ment safety standards and environmental Protection Agency clean air standards. The Gas guzzler lax became Law with the Energy tax actor 1978, when millions of americans waited in Long lines at service stations during what the Oil Industry described As gasoline shortage. The legislation s goal was to encourage manufacturers to make More fuel efficient cars. Irs official Ron Linden said no new development was responsible for the ruling. He said there had been a question about whether the tax applied to direct imports and the Agency wanted to Lay the matter to rest in wanting. There s nothing secret about what we re doing Lin Den said. If a Serviceman in Europe is thinking about bringing Back a Mercedes or Bow he deserves to know there s a tax that ought to be  John Hamilton of the irs excise tax department said the ruling assumes that direct imports deserve the lowest mileage rating because european and other imports not built to . Standards have lower fuel Economy ratings than . Autos. Hamilton said the ruling is retroactive to 1980 be cause that is when the Energy tax Law was passed. He said importers have been liable for the tax since then. The Epa certifies that autos built by Large manufacturers or brought to the United states by Large importers meet . Clean air standards. The certification is based on tests of prototype vehicles. Fuel Economy testing is done at the same time As clean air tests. The exhaust emissions tests Are the Urban portion of the mileage test. The Complete mile age test includes a Highway portion. The Epa has a test Laboratory in Michigan but most testing is done by Epa approved commercial labs Epa testing official Greg Dana said. There Are about 45 approved labs. Cars Are tested on a dynamometer which permits them to be started put in gear and driven in the lab Dana said. The cars tank is filled 40 percent. In the Urban Cycle the car goes 20 Miles per hour with More than two stops per mile. In the Highway portion the car averages 48 Mph hitting a High of 59 Mph and averages Only one Stop in 10 Miles. The Urban and Highway portions arc combined in a weighted average Urban 55 percent and Highway 45 per cent and that becomes the official Epa fuel Economy rating. Cars that Don t conform to . Safety and clean air standards when they arc imported May be modified by installing anti pollution equipment that makes them similar in every relevant respect to a car certified by Epa As meet ing the Law s requirements. The irs procedures staffer said the tax on such imports would be the same As the tax on the certified Model. The ruling included a list of the fuel Economy ratings for modified foreign autos that demonstrated they meet . Clean air standards. For the first four years the makes were largely Aston Martin Ferrari Maserati and Rolls Royce. In 1985, the Bow 7 series and Mercedes 380 and 500 series made the list. This year the Bow 5 series and Bow 6 series cars an the porsche 911 have official Epa fuel Economy ratings. For example a new 209 cubic Inch six Cylinder Bow 5 series Auto has an Epa rating of 21.2 Miles per gallon. Under the Miles per gallon lax tables published in the Federal Register last july 23, the owner or importer would have to pay s650 in tax. To avoid any tax a 1986 car must get at least 22.5 Miles per gallon. As an alternative to the prototype procedure direct imports May be modified and then tested individually to demonstrate that they meet clean air requirements. But the ruling Points out that neither of those proce dures provides a mileage figure. The emissions test pro Vides Only the Urban portion of the fuel Economy test. Test facility engineers in Virginia Maryland and Pennsylvania estimated the Highway test which adds about 15 minutes to the 45-Minutc Urban test could be run and a mileage figure for a Gray Market import deter mined for about $150. The ruling requires the test paperwork to remain wit the car three years in Case of a Challenge to the fuel Economy figure. The trans pollution department counted 67,000 Gray mar Ket vehicles imported last year and it has estimated 120,000 will arrive this year. But there is evidence that a weakening Dollar has substantially slowed the rate of direct importing. In congressional debate last year Over legislation to restrict such imports rep. Thomas Bliley r-va., de scribed Why Gray Market cars arc attractive. Bliley said a top of the Linc Mercedes has a declared value of about $21,000 at the port of Baltimore. But the same car will have a $50,000 Price tag in a dealer s showroom elsewhere in the City. He estimated american Consumers could save $8,000 to $ 12,000 per car by buying it overseas shipping it backhand paying a conversion firm to modify the car and demonstrate that it meets safety and clean air standards. Industry figures show that 15,000  brought Back such cars especially Mercedes and bows from Germany last year. The automobile importers compliance association s Normandy said people who want to join a lawsuit against the Rule should Contact Matt Low Schuller & Low 12030 Sunrise Valley drive suite 290, Reston a. 22091. Epa ratings applicable tax listed Washington if you re thinking of bringing a Gray Market foreign car Home with you Don t take dealer s word for its gasoline mileage rating internal Revenue service and environmental Protection Agency officials  purposes of the Gas guzzler tax the rating must be determined by the Epa or an Epa approved lab. And the lest must be done in strict compliance with the Feder Al lest procedure Laid Down in Federal regulations. The Epa has a lab in Michigan and about 45 approved labs near East coast and West coast ports Are on its list of approved  following is a list of Miles per gallon ratings and the applicable tax for Model years 1980 through 1986. The source is the Federal Register of july 23,1985 year Miles per gallon tax 1980 at least 15 0 at least 14 but less than 15 $200 13-14 $300 less than 13 $5501981 at least 17 0 at least 16 but less than 17 $200 15-16 $350 14-15 $450 13-14 $550 less than 13 $650 1982 at least 18.5 0 at least 17.5 but less than 18.5 $20016.5-17.5 $350 15.5-16.5 $450 14.5-15.5 $600 13.5-14.5 $750 12.5-13.5 $950 less than 12.5 $1,200 1983 at least 19 0at least 18 but less than 19 $350 17-18 $500 16-17 $650 15-16 $800 14-15 $1,000 13-14 $1,250less than 13 $1,550 1984 at least 19.5 0 at least 18.5 but less than 19.5 $450 17.5-18.5 $600 16.5-17.5 $750 15.5-16.5 $95014.5-15.5 $1,150 13.5-14.5 $1,450 12.5-13.5 $1,750 less than 12.5 $2,1501985 at least 21 0 at least 20 but less than 21 $50019-20 $600 18-19 $800 17-18 $1,000 16-17 $,200 15-16 $1,500 14-15 $1,800 13-14 $2,200less than 13 $2,650 1986 at least 22.5 0 at least 21.5 but less than 22.5 $500 20.5-21.5 $650 19.5-20.5 $850 18.5-19.5 $1,05017.5-18.5 $1,300 16.5-17.5 $1.500 15.5-16.5 $1.850 14.5-15.5 $2,250 13.5-14.5 $2,700 12.5-13.5 $3,200 less than 12.5 -$3,850 new zealand protester arrested near Queen s motorcade Wellington new zealand up a truck carrying Maori land rights pro testers tried to intercept Queen Elizabeth s motorcade thursday but was stopped by police a police spokesman said. The truck covered with painted slogans was Cut off by a police car just outside Wellington and officers arrested Maori activist Dun Miyaka. Mihalka s truck was stopped As it at tempted to pull onto the motorcade route from an intersecting Side Street after the Queen s car passed the intersection police Laid. There was a screech of brakes and a police car blocked the truck said Gladys buckle of Wellington a witness. Another vehicle hit the Side of the truck. The next moment we saw Mihalka being pulled  the Queen went on to her next engagement apparently unaware of what had happened. Elizabeth ii who arrived in new zealand with her husband. Prince Philip saturday for a nine Day visit has been the target of Maori land rights protesters and has become involved in new zealand s disagreement with the United states Over the Banning of nuclear warships from new zealand ports. On monday she was bit with two raw eggs thrown by two women protesters who posed As crowd control officials at a sports stadium where the Queen greeted 40,000 schoolchildren. The following Day a Maori Man wearing Only a grass skirt bared his buttocks As the Queen and Prince Philip visited the Provin Cial City of Napier on North Island. The Baring of buttocks is a traditional Maori insult. Mihalka earlier threatened to give the Queen a "21-bum Salute with Fel Low land rights demonstrators. The maoris Are protesting the Wai Tangi treaty of 1841 in which Britain the ruling colonial Power gave Maori chiefs Protection in return for the exclusive rights of traditional land Purchase. Maoris say the treaty has been abused and land illegally taken from them. Wednesday the Queen was drawn into the controversy Over new zealand s ban on nuclear capable warships from its ports. In her traditional speech at the opening of parliament in Wellington she said legislation to formalize the ban was not intended to weaken the anus defense pact Between Australia new zealand and the United states. The speech was prepared for her by the government. Opposition Leader Jim Mclay said the government was insensitive to include such controversial material. He noted the speech contradicted British policy opposing the nuclear warship ban