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Excise tax

Which is an example of an excise tax?

Excise taxes are most often levied upon cigarettes, alcohol, gasoline and gambling. These are often considered superfluous or unnecessary goods and services. To raise taxes on them is to raise their price and to reduce the amount they are used. In this context, excise taxes are sometimes known as “sin taxes.”

What is the Washington excise tax?

Real estate excise tax (REET) is a tax on the sale of real estate. The real estate excise tax is typically paid by the seller of the property, although the buyer is liable for the tax if it is not paid. … The tax also applies to transfers of controlling interests (50% or more) in entities that own property in the state.

What is an excise tax in economics?

An excise tax is a tax on a specific commodity. Such a tax may raise the price of the commodity to the consumer and reduce the net price received by the producer. It generally will do both and reduce the amount marketed and purchased.

What is Canadian excise tax?

Excise duties are charged on spirits, wine, beer, and tobacco products. … When these goods are manufactured in Canada, duty is payable on the goods at the point of packaging rather than at the point of sale. Generally, when they are imported into Canada, duty is payable by the importer when the goods are imported.

What is the purpose of an excise tax?

Excise taxes are taxes required on specific goods or services like fuel, tobacco, and alcohol. Excise taxes are primarily taxes that must be paid by businesses, usually increasing prices for consumers indirectly. Excise taxes can be ad valorem (paid by percentage) or specific (cost charged by unit).

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How do you calculate federal excise tax?

To calculate the excise tax amount, multiply the vehicle’s purchase price by the excise tax percentage or millage rate. For example, a new car buyer in Maine pays a millage rate of . 0240. If the car costs $18,000, multiply $18,000 by .

What is the King County excise tax rate?


Are real estate excise taxes deductible?

Although the IRS allows you to deduct state sales or income taxes, the rules do not allow you to deduct any state or local excise taxes paid on the sale of your property. … Also, since it’s a transfer tax, you can’t deduct it as a property tax on Schedule A.

Is Washington B&O tax an excise tax?

Business and occupation tax overview

​Washington’s B&O is an excise tax measured by the value of products, gross proceeds of sales, or gross income of a business with over 30 different classifications and associated tax rates ranging from 0.138 percent to 1.5 percent.

What are the two types of indirect excise taxes?

There are two main types of excise taxes: Ad Valorem, and Specific. Ad Valorem: these taxes are levied on a fixed percentage of the value of a good or service.

Who will generally bear the burden of an excise tax?

Poterba (1996) offers evidence that consumers bear the full burden of U.S. excise and sales taxes in the form of higher prices, but Besley and Rosen (1999) find that many consumer prices rise by more than 100 percent of excise and sales taxes imposed by U.S. states and localities.

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