Excise Tax

What is Excise Tax?

Excise tax is a legislated tax on specific goods or services at the time of purchase, such as fuel, tobacco, or alcohol. Unlike general sales taxes, excise taxes are often included in the price of the product rather than added at the register.

Why It Matters

• Governments use these taxes to raise revenue and to discourage the consumption of certain products.

• They are often “hidden” from the consumer but represent a significant portion of the final retail price.

• Businesses selling these products must carefully track and remit these taxes to the appropriate authorities.