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.