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.