Tax Horsepower

The tax horsepower or taxable horsepower was an early system by which taxation rates for automobiles were reckoned in some European countries, such as Britain, Belgium, Germany, France, and Italy; some US states like Illinois charged license plate purchase and renewal fees for passenger automobiles based on taxable horsepower. The tax horsepower rating was computed not from actual engine power but by a simple mathematical formula based on cylinder dimensions. At the beginning of the twentieth century tax power was reasonably close to real power; as the internal combustion engine developed, real power became larger than nominal taxable power by a factor of ten or more.