Excise Taxes: From The Encyclopedia of Taxation and Tax Policy

Excise taxes are levied on the manufacture, sale, or consumption of a single good or service or on a relatively narrow range of goods or services. They are an example of what have been traditionally called indirect taxes: taxes that are imposed on a transaction rather than directly on a person or corporation. Excise taxes are narrowly based consumption taxes, as compared with broad-based taxes such as a general sales tax or an expenditure tax. This article details the rationale for, economic impacts and use of excise taxes.