Excise tax definition

What is the difference between excise and tax? What does excise tax in the United States mean? How is excise tax different from sales tax? Other articles from investopedia. In current usage the term has been extended to include various license fees and practically every internal revenue tax except the Income Tax (e.g., federal alcohol and tobacco excise taxes).

One of the major components of the excise program is motor fuel. But sales tax differs from excise tax in that it applies to virtually all goods while excise taxes only apply in specific instances. These include: Air fare and jet fuel. For instance, goods such as cigarettes and alcohol are often taxed by the state or local authority, at a flat rate per item. A Federal or state tax imposed on the manufacture and distribution of certain non-essential consumer goods.

Examples of excise taxes include environmental taxes, communications taxes, and fuel taxes. First, it is only on specific goods. Legal Definition of excise. A tax , similar to a sales tax , imposed on some goods, especially luxuries and cars.

Excise tax differs from sales tax in two fundamental ways. An excise tax is a tax on the transfer of ownership from the seller to the buyer paid at closing. The tax amount is based on the sale price of the home and varies by state and local government. A tax imposed on the performance of an act, the engaging in an occupation, or the enjoyment of a privilege. Excise definition , an internal tax or duty on certain commodities, as liquor or tobacco, levied on their manufacture, sale, or consumption within the country.

Fuel charge Information on the fuel charge under the Greenhouse Gas Pollution Pricing Act. How to pronounce excise tax. Listen to the audio pronunciation in the Cambridge English Dictionary. Tobacco Tax is imposed on cigarettes and other tobacco products.

Cigarettes include any roll for smoking made, wholly or in part, of tobacco, irrespective of size or shape and whether or not the tobacco is flavore. The excise tax amount is based on the vehicle class and age. The age of a vehicle is determined by subtracting the model year from the calendar year that the vehicle is due to be registered. The class of a vehicle is based on the vehicle value as determined by the manufacturer’s original retail price. A tax collector does not have to accept partial payments of a motor vehicle excise bill.

You do not have the legal right to partially pay an excise , unlike a property tax or betterment. Combined Excise Tax This return is used for reporting your business income, sales tax, and use tax. Use this form if you do not qualify to use the tax returns below. A graduated tax charged by a city, state, or national government on the use of a commodity or service.

The greater the use, the higher the tax. Perhaps the most common examples are the taxes levied on tobacco and liquor, often called sin taxes because drinking and smoking are considered vices. To cover the tax , the seller will usually raise the price of the item.

There is also an excise tax on gasoline. Definition Federal Excise Tax (FET) — a tax imposed on premium payments to offshore insurers: percent on direct premiums and percent on reinsurance premiums. INDIRECT TAX imposed by the government on a product, principally those such as tobacco, petrol and alcoholic drinks, the demand for which is highly price-inelastic (see ELASTICITY OF DEMAND). Governments use excise duties both as a means of raising revenue (see BUDGET) and as an instrument of FISCAL POLICY. See CUSTOMS AND EXCISE.

Like a property tax , which pays for services in the city or town in which the property is locate revenue from the Motor Vehicle Excise Tax is used by Massachusetts municipalities to provide public services. This return is used for reporting your business income, sales tax , and use tax.