excise tax

/ɛkˈsaɪz tæks/

Other forms: excise taxes

An excise tax is a fee the government charges on goods at the time they're manufactured, rather than when they're sold to consumers.

An excise tax is known as a "hidden tax," because it's indirectly paid by consumers. The price of gas is one example; excise taxes are paid by the manufacturer, but that cost is bundled into the amount drivers are charged at the gasoline pump. The word excise comes from the Middle Dutch excijs, "tax." It was coined in English along with the type of tax itself, modeled on similar taxes in Holland, in the 15th century.

Definitions of excise tax

1. noun

   a tax that is measured by the amount of business done (not on property or income from real estate)
   synonyms: excise

   types:

   nuisance tax, sales tax

   a tax based on the cost of the item purchased and collected directly from the buyer

   VAT, ad valorem tax, value-added tax

   a tax levied on the difference between a commodity's price before taxes and its cost of production

   gasoline tax

   a tax on every gallon of gasoline sold

   type of:

   indirect tax

   a tax levied on goods or services rather than on persons or organizations