What Is An Excise Tax And How Does It Work?

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Excise taxes, applied to specific goods or services like tobacco and fuel

Applied To Specific Goods

Originating in the U.S. in 1791, excise taxes have evolved to cover various goods, services, and activities


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Excise taxes, primarily business taxes, are passed on to consumers through higher prices set by merchants.

Business Taxes

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Divided into ad valorem (percentage-based) and specific (fixed amount) categories, excise taxes, often known as "sin taxes"

Sin Taxes

While excise taxes may go unnoticed by consumers in some cases, businesses file Form 720 to report and pass on these taxes