An excise or excise tax is an indirect tax charged on certain goods. As an indirect tax, they are charged by the producer or the merchant who then has to pay the government. For the same reason they are also not considered a sales tax. Excise taxes are commonly part of the retail price of a product such as gasoline, alcohol or cigarettes. Excise taxes may be charged by both state and federal governments.
Excise
Questions and Answers
Q: What is an excise tax?
A: An excise tax is an indirect tax charged on certain goods.
Q: Who pays the excise tax?
A: The producer or the merchant who sells the goods pays the excise tax to the government.
Q: Is excise tax considered as a sales tax?
A: No, excise tax is not considered as a sales tax because it is an indirect tax.
Q: What are some products that commonly have excise taxes?
A: Products such as gasoline, alcohol, and cigarettes commonly have excise taxes.
Q:Which government levels can charge excise taxes?
A: Excise taxes may be charged by both state and federal governments.
Q: Why is the excise tax charged to the producer or the merchant?
A: Excise tax is charged to the producer or the merchant because it is an indirect tax.
Q: How is the excise tax included in the product’s price?
A: The excise tax is commonly included in the retail price of a product.