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Excise Tax

Definition - What does Excise Tax mean?

Excise tax refers to an inland tax imposed on the sale, manufacture, and use of certain products and goods. In some jurisdictions, excise tax is also levied on certain activities, such as gambling. In the context of U.S. taxation laws, excise tax may also refer to tax levied on certain transactions in retirement plans.

Justipedia explains Excise Tax

Excise tax can be compared to custom duty in the way that they are both levied. The major difference between them is that custom duty is a border tax whereas excise is an inland tax. Since the tax is shifted from the manufacturer or seller of the goods to the buyer by raising the price of the good, excise is regarded as indirect tax. In most jurisdictions, excise is generally charged on fuel, spirits, and tobacco products.

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