What are examples of excise tax?
Some example excise taxes that are levied by the federal government include:
- Alcohol: per unit excise tax.
- Tobacco products: per unit excise tax.
- Firearms and ammunition: per unit excise tax.
- Gasoline and diesel: per unit excise tax.
- Sport fishing equipment: percentage of price excise tax.
What is the point of excise tax?
Excise duties usually have one or two purposes: to raise revenue and to discourage particular behavior or purchase of particular items. Taxes such as those on sales of fuel, alcohol and tobacco are often “justified” on both grounds.
What are the two types of excise tax?
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 state has the highest alcohol tax?
The ten states with the highest alcohol tax per gallon of spirits are:
- Washington ($33.22)
- Oregon ($21.95)
- Virginia ($19.89)
- Alabama ($19.11)
- Utah ($15.92)
- North Carolina ($14.58)
- Kansas ($13.03)
- Alaska ($12.80)
Why is alcohol taxed so heavily?
In the late 1800s, governments also used taxation to discourage alcoholism and public drunkenness – the primary justification for high alcohol taxes today. A 2006 report for the European Commission argued that using taxes to raise the price of alcohol 10 percent would save 9,000 lives per year.
What type of tax are sales tax and excise tax?
Sales and excise taxes, or consumption taxes, are an important revenue source, comprising close to half of all state tax revenues. These taxes are levied in each of the fifty states and are often considered “hidden” to consumers since they’re spread out over many purchases rather than paid in one lump sum.
Who is responsible for federal excise tax?
The federal government collects over $100 billion of excise taxes per year. Two agencies under the U.S. Treasury Department administer all existing excise taxes: the Internal Revenue Service (IRS) and the Alcohol and Tobacco Tax and Trade Bureau (TTB).
What states have no excise tax?
Most states have sales tax to help generate revenue for its operations – but five states currently have no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.