What is meant by excise tax?
Excise taxes are taxes that are imposed on various goods, services and activities. Such taxes may be imposed on the manufacturer, retailer or consumer, depending on the specific tax. Form 720, Quarterly Federal Excise Tax Return, is available for optional electronic filing.
Which best defines excise tax?
An excise tax is a tax on the purchase of a specific good or service, such as alcohol, cigarettes or gambling. Some excise taxes are imposed by the federal government, while others are imposed by the state government.
What is the purpose of excise taxes?
Excise taxes can be used to price an externality or discourage consumption of a product that imposes costs on others. They can also be employed as a user fee to generate revenue from people who use particular government services, revenue which should be used to maintain that government service.
What’s another name for excise tax?
What is another word for excise?
What are the two types of excise tax?
Specific Tax – refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement. Ad Valorem Tax – refers to the excise tax which is based on selling price or other specified value of the goods/articles.
What are three types of excise taxes?
Today, there are federal excise taxes on motor fuel, tobacco, and alcohol, among other goods, services, and activities, in addition to a wide range of state excise taxes.
What is the difference between an excise tax and a general sales tax?
What’s the Difference between Excise Duty and Sales Tax? Excise duty applies to specific goods and services while sales tax is charged for a much broader range of things. Sales tax is typically charged as a percentage of the cost, while excise duty can be charged as a percentage of the cost or on a per-unit basis.