What Is an Excise Tax?
An excise tax is a tax on a specific good or activity, such as gasoline, alcohol, tobacco, or airline tickets. It is often included in the price rather than shown at checkout, and it may be a fixed amount per unit — such as per gallon — or a percentage of the price.
Excise Tax vs. Sales Tax
Sales tax applies broadly to many purchases and is usually added at checkout; excise taxes target particular products and are often built into the shelf price.
Purposes
Excise taxes raise revenue, and some are intended to discourage certain consumption or to fund related spending, such as road maintenance.
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🔗 Related Terms
More Taxes Terms
- Additional Medicare Tax
- Adjusted Gross Income (AGI)
- Alternative Minimum Tax (AMT)
- Capital Gains Tax
- Capital Loss
- Child Tax Credit
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.