What is excise tax

Ad valorem is a Latin phrase that literally means "according to value. This results in an excise tax that is based on the value of the product or service. Specific excise taxes are a set tax or fee added to a certain product on a per-unit basis.

Often sin taxes on targeted goods like beer and alcohol will be taxed at the federal level and also taxed heavily by the state, making the cost of these items higher.

These taxes have a considerable impact on the consumer. Excise taxes are also charged on some retirement account activities. Many people are familiar with these taxes as penalties. Required minimum distributions are mandatory after age 72 for anyone who reaches age Internal Revenue Service. Tax Policy Center. Accessed Jan. Department of the Treasury. Tax Laws. Traditional IRA.

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We and our partners process data to: Actively scan device characteristics for identification. These include:. Depending on the item, the excise tax might be assessed as a percentage of the final cost, such as the 7. There may even be additional excise taxes at the state level.

However, excise taxes also go toward paying for expenses related to the good being taxed, as in how new road construction is funded by the gasoline tax. Before taking a side in the debate, consider these factors. If you live in or work for a company in Mississippi, you might have to file a state income tax return. Did you find the content on this page helpful? Yes No. Reset Submit. Page Rating Thanks for Rating. Emergency Notifications There are 1 notifications for you. This is an external link and you will navigate outside the Ministry's web site.

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