Legal Dictionary - Excise tax

An Excise Tax is a tax on a specific item, belonging to a special class of items.

The classes of items are frequently specialty or luxury items.

Some everyday examples:

A Federal excise tax is levied on motor fuel consumed during highway use; gasoline and diesel fuel exclusively consumed during off-road farming activities are not taxed. By statute, the fuel tax proceeds must be used for Federal highway projects.

An excise tax is levied on tobacco products, at the State level.

An excise tax is levied on alcohol products, at the State level.

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