Excise - AbsoluteAstronomy.com

U.S. Historical Excise Tax Collections by Federal Government (All dollar amounts are in millions of U.S. dollars)

Year	Tariff Income	Receipts % Tariff	Federal Receipts	Income Tax	Payroll Tax	Receipts % Excise
1792	$4.4	95.0%	$4.6	$-	$-	4.7%
1795	$5.6	91.6%	$6.1	$-	$-	5.5%
1800	$9.1	83.7%	$10.8	$-	$-	7.5%
1805	$12.9	95.4%	$13.6	$-	$-	0.2%
1810	$8.6	91.5%	$9.4	$-	$-	1.1%
1815	$7.3	46.4%	$15.7	$-	$-	29.7%
1820	$15.0	83.9%	$17.9	$-	$-	0.6%
1825	$20.1	97.9%	$20.5	$-	$-	0.1%
1830	$21.9	88.2%	$24.8	$-	$-	0.0%
1835	$19.4	54.1%	$35.8	$-	$-	0.0%
1840	$12.5	64.2%	$19.5	$-	$-	0.0%
1845	$27.5	91.9%	$30.0	$-	$-	0.0%
1850	$39.7	91.0%	$43.6	$-	$-	0.0%
1855	$53.0	81.2%	$65.4	$-	$-	0.0%
						1860	$53.2	94.9%	$56.1	$-	$-	0.0%
1863	$63.0	55.9%	$112.7	$-	$-	0.0%
1864	$102.3	38.7%	$264.6	$-	$-	0.0%
1865	$84.9	25.4%	$333.7	$61.0	$-	63.2%
1870	$194.5	47.3%	$411.3	$37.8	$-	44.7%
1875	$157.2	54.6%	$288.0	$-	$-	38.2%
1880	$184.5	55.3%	$333.5	$-	$-	37.2%
1885	$181.5	56.1%	$323.7	$-	$-	34.7%
1890	$229.7	57.0%	$403.1	$-	$-	35.4%
1900	$233.2	41.1%	$567.2	$-	$-	51.0%
1910	$233.7	34.6%	$675.2	$-	$-	42.8%
1913	$318.8	44.0%	$724.1	$35.0	$-	47.5%
1915	$209.8	30.1%	$697.9	$47.0	$-	59.5%
1916	$213.7	27.3%	$782.5	$121.0	$-	0.0%
1917	$225.9	20.1%	$1,124.3	$373.0	$-	0.0%
1918	$947.0	25.8%	$3,664.6	$2,720.0	$-	0.0%
1920	$886.0	13.2%	$6,694.6	$4,032.0	$-	0.0%
1925	$547.6	14.5%	$3,780.1	$1,697.0	$-	0.0%
1928	$566.0	14.0%	$4,042.3	$2,088.0	$-	13.3%
1930	$587.0	14.1%	$4,177.9	$2,300.0	$-	13.5%
1935	$318.8	8.4%	$3,800.5	$1,100.0	$-	35.9%
1940	$331.0	6.1%	$5,387.1	$2,100.0	$800.0	34.2%
1942	$369.0	2.9%	$12,799.1	$7,900.0	$1,200.0	32.5%
1944	$417.0	0.9%	$44,148.9	$34,400.0	$1,900.0	13.1%
1946	$424.0	0.9%	$46,400.0	$28,000.0	$1,900.0	15.1%
1948	$408.0	0.9%	$47,300.0	$29,000.0	$2,500.0	15.6%
1950	$407.0	0.9%	$43,800.0	$26,200.0	$3,000.0	17.2%
1951	$609.0	1.1%	$56,700.0	$35,700.0	$4,100.0	15.3%
1955	$585.0	0.8%	$71,900.0	$46,400.0	$6,100.0	12.7%
1960	$1,105.0	1.1%	$99,800.0	$62,200.0	$12,200.0	11.7%
1965	$1,442.0	1.2%	$116,800.0	$74,300.0	$22,200.0	12.5%
1970	$2,430.0	1.3%	$192,800.0	$123,200.0	$44,400.0	8.1%
1975	$3,676.0	1.3%	$279,100.0	$163,000.0	$84,500.0	5.9%
1980	$7,174.0	1.4%	$517,100.0	$308,700.0	$157,800.0	4.7%
1985	$12,079.0	1.6%	$734,000.0	$395,900.0	$255,200.0	4.9%
1990	$11,500.0	1.1%	$1,032,000.0	$560,400.0	$380,000.0	3.4%
1995	$19,301.0	1.4%	$1,361,000.0	$747,200.0	$484,500.0	4.2%
2000	$19,914.0	1.0%	$2,025,200.0	$1,211,700.0	$652,900.0	3.4%
2005	$23,379.0	1.1%	$2,153,600.0	$1,205,500.0	$794,100.0	3.4%
2010	$25,298.0	1.2%	$2,162,700.0	$1,090,000.0	$864,800.0	3.1%
----------------------------------------------------------------------------------------------------------
Notes: All dollar amounts are in millions of U.S. dollars Income taxes include Individual and Corporate taxes Federal expenditures often exceed Revenue by temporary borrowings. Initially the U.S. Federal Government was financed mainly by customs Customs Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country... (tariffs Average excise % is calculated by dividing Excise Revenue by Total Revenue. Other taxes collected are: Income Tax, Corporate Income Tax, Inheritance, Tariffs—often called Customs or duties on imports, etc. Income Taxes began in 1913 with the passage of 16th Amendment. Payroll taxes are Social Security and Medicare taxes Payroll Taxes began in 1940. Many Federal government Excise Excise Excise tax in the United States is a indirect tax on listed items. Excise taxes can be and are made by federal, state and local governments and are far from uniform throughout the United States... taxes are assigned to Trust Funds and are collected for and “dedicated” to a particular Trust. Sources: Historical Statistics of the United States 1789-1945 Bicentennial Edition Historical Statistics of the United States Series 1790-1970 U.S. Census Trade Statistics Whitehouse Historical Tables 1940-2016

Excise tax in the United States is a indirect tax

Indirect tax

The term indirect tax has more than one meaning.In the colloquial sense, an indirect tax is a tax collected by an intermediary from the person who bears the ultimate economic burden of the tax...

on listed items. Excise taxes can be and are made by federal, state and local governments and are far from uniform throughout the United States. Excise taxes are collected by the producer or retailer and not paid directly by the consumer, and as such often remain "hidden" in the price of a product or service, rather than being listed separately. This is thought to explain their appeal to many politicians.

Constitutional law

The U.S. Constitution, ratified in 1789, gave the federal government authority to tax, stating that Congress has the power to

"... lay and collect taxes, duties, imposts and excises, pay the debts and provide for the common defense and general welfare of the United States."

Tariffs between states are prohibited by the U.S. Constitution and all domestically made products can be imported or shipped to another state tax free. In the U.S. constitutional law sense, an excise tax is essentially an event tax (as opposed to a state of being tax).

Historical Background

Federal Excise taxes have a storied background in the United States.
Responding to an urgent need for revenue following the American Revolutionary War

American Revolutionary War

The American Revolutionary War , the American War of Independence, or simply the Revolutionary War, began as a war between the Kingdom of Great Britain and thirteen British colonies in North America, and ended in a global war between several European great powers.The war was the result of the...

, after passage of the U.S. Constitution the First United States Congress passed, and President George Washington

George Washington

George Washington was the dominant military and political leader of the new United States of America from 1775 to 1799. He led the American victory over Great Britain in the American Revolutionary War as commander-in-chief of the Continental Army from 1775 to 1783, and presided over the writing of...

, signed the Tariff Act

Hamilton tariff

The Hamilton Tariff was the second statute ever enacted by the new federal government of the United States by a vote of the first U.S. Congress. Most of the rates of the revenue tariff were between 5 and 10 percent, depending on the value of the item...

of July 4, 1789, which authorized the collection of duties on imported goods. Customs

Customs

Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country...

duties as set by tariff

Tariff

A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

rates up to 1860 were usually about 80-95% of all federal revenue. Having just fought a war over taxation (among other things) the U.S. Congress wanted a reliable source of income that was relatively unobtrusive and easy to collect. Tariffs and excise taxes were authorized by the United States Constitution

United States Constitution

The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...

and recommended by the first U.S. Treasury Secretary, Alexander Hamilton

Alexander Hamilton

Alexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...

in 1789 to tax foreign imports and set up low excise taxes to provide the Federal Government with enough money to pay its operating expenses and to redeem at full value U.S. Federal debts and the debts the states had accumulated during the American Revolutionary War

American Revolutionary War

. Hamilton thought it was important to start the U.S. Federal government out on a sound financial basis with good credit. The first Federal budget was about $4.6 million dollars and the population in the 1790 U.S. Census was about four million. Hence the average federal tax was about $1/person per year. Then tradesmen earned about $0.25 a day for a 10-12 hour day so federal taxes could be paid with about four days work. Paying even this was usually optional as taxed imports listed on the tariff lists could usually be avoided if desired.

The Congress set low excise taxes on only a few goods, such as, whiskey, rum

Rum

Rum is a distilled alcoholic beverage made from sugarcane by-products such as molasses, or directly from sugarcane juice, by a process of fermentation and distillation. The distillate, a clear liquid, is then usually aged in oak barrels...

, tobacco

Tobacco

Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...

, snuff

Snuff

Snuff is a product made from ground or pulverised tobacco leaves. It is an example of smokeless tobacco. It originated in the Americas and was in common use in Europe by the 17th century...

and refined sugar

Sugar

Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...

. There were initially no other significant sources of federal income besides tariffs. The excise tax on whiskey was so despised it led to the Whiskey Rebellion

Whiskey Rebellion

The Whiskey Rebellion, or Whiskey Insurrection, was a tax protest in the United States in the 1790s, during the presidency of George Washington. Farmers who sold their corn in the form of whiskey had to pay a new tax which they strongly resented...

which had to be quelled by Washington calling up the Militia

Militia

The term militia is commonly used today to refer to a military force composed of ordinary citizens to provide defense, emergency law enforcement, or paramilitary service, in times of emergency without being paid a regular salary or committed to a fixed term of service. It is a polyseme with...

and repressing the rebellious farmers--all were later pardoned. The whiskey excise tax collected so little and was so despised it was abolished by President Thomas Jefferson

Thomas Jefferson

Thomas Jefferson was the principal author of the United States Declaration of Independence and the Statute of Virginia for Religious Freedom , the third President of the United States and founder of the University of Virginia...

in 1802. In the Napoleonic Wars

Napoleonic Wars

The Napoleonic Wars were a series of wars declared against Napoleon's French Empire by opposing coalitions that ran from 1803 to 1815. As a continuation of the wars sparked by the French Revolution of 1789, they revolutionised European armies and played out on an unprecedented scale, mainly due to...

and the War of 1812

War of 1812

The War of 1812 was a military conflict fought between the forces of the United States of America and those of the British Empire. The Americans declared war in 1812 for several reasons, including trade restrictions because of Britain's ongoing war with France, impressment of American merchant...

the imports to the United States plummeted and the Congress in 1812 brought back the excise tax on whiskey to compensate for the loss of customs

Customs

revenue. Within a few years customs duties (tariff) brought in enough federal income to again abolish nearly all federal excise taxes. When the United States public debt

United States public debt

The United States public debt is the money borrowed by the federal government of the United States at any one time through the issue of securities by the Treasury and other federal government agencies...

was finally paid off in 1834 President Andrew Jackson

Andrew Jackson

Andrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...

kept the excise tax zeroed out and reduced the customs duties (tariffs) in half.

Excise taxes stayed essentially zero till the U.S. Civil War brought a need for much more federal revenue. Excise taxes were reintroduced on a wider range of items and Income taxes (later declared unconstitutional) were introduced. By about 1916 the loans taken out during the Civil War were all paid off and the excise taxes were again set very low. On January 16, 1919 the 18th Amendment

Eighteenth Amendment to the United States Constitution

The Eighteenth Amendment of the United States Constitution established Prohibition in the United States. The separate Volstead Act set down methods of enforcing the Eighteenth Amendment, and defined which "intoxicating liquors" were prohibited, and which were excluded from prohibition...

was passed and alcohol production, sale and transport were essentially prohibited. Taxing alcohol products would have produced almost no income. Excise taxes remained essentially zero for the next ten years.

During the Great Depression (1929-1939) President Franklin Roosevelt and Congress started reintroducing excise taxes to increase federal income which had dropped because of the much lower income tax collections. On December 5, 1933 the 21st Amendment

Twenty-first Amendment to the United States Constitution

The Twenty-first Amendment to the United States Constitution repealed the Eighteenth Amendment to the United States Constitution, which had mandated nationwide Prohibition...

was ratified and alcohol production became legal again. The healthy excise taxExcise Tax Collectionshttp://www.usgovernmentrevenue.com/downloadsrs_gr.php?codes=A01_A44_A45_A60_A87&units=r&group=41&fy=fy12 Accessed 8 Aug 2011 on now legal alcoholic beverages paid about one-third of all federal taxes during the Great Depression.

Excise taxes now have become an established part of the general budget as well as the source of funds for various trusts. The U.S. has expanded the definition of items on the excise tax lists as trusts for highways, airports, vaccine

Vaccine

A vaccine is a biological preparation that improves immunity to a particular disease. A vaccine typically contains an agent that resembles a disease-causing microorganism, and is often made from weakened or killed forms of the microbe or its toxins...

s, black lung

Coalworker's pneumoconiosis

Coal workers' pneumoconiosis , colloquially referred to as black lung disease, is caused by long exposure to coal dust. It is a common affliction of coal miners and others who work with coal, similar to both silicosis from inhaling silica dust, and to the long-term effects of tobacco smoking...

, oil spills, etc. have been set up. These are financed by excise taxes on fuels, tickets, vaccines, coal, oil etc.

Excise Tax Types

U.S. Excise Collections 2010 by Federal Government (All dollar amounts are in millions of U.S. dollars)

2010 Excise Taxes	Millions	Percent
Alcohol	$9,229.0	13.8%
Tobacco	$17,160.0	25.6%
Telephone	$993.0	1.5%
Transportation fuels	$(11,030.0)
Other	$1,904.0	2.8%
Total	$18,256.0	27.3%
Trust funds:
Transportation	$34,992.0	52.3%
Airport and airway	$10,612.0	15.9%
Black lung disability	$595.0	0.9%
Inland waterway	$74.0	0.1%
Oil spill liability	$476.0	0.7%
Aquatic resources	$580.0	0.9%
Leaking underground storage tank	$169.0	0.3%
Tobacco Assessments	$937.0	1.4%
Vaccine injury compensation	$218.0	0.3%
Total Trusts	$48,653.0	72.7%
Total, Excise Taxes	$66,909.0
-----------------------------------------------------------------------------
Notes: All dollar amounts are in millions of U.S. dollars Some Excise Excise Excise tax in the United States is a indirect tax on listed items. Excise taxes can be and are made by federal, state and local governments and are far from uniform throughout the United States... taxes are assigned to Trust Funds and are collected for and “dedicated” to the Trust.

Excise taxes are generally taxes on events like the purchase of a quantity of a particular item like: gasoline

Gasoline

Gasoline , or petrol , is a toxic, translucent, petroleum-derived liquid that is primarily used as a fuel in internal combustion engines. It consists mostly of organic compounds obtained by the fractional distillation of petroleum, enhanced with a variety of additives. Some gasolines also contain...

, diesel fuel, liquor, wine, cigarette

Cigarette

A cigarette is a small roll of finely cut tobacco leaves wrapped in a cylinder of thin paper for smoking. The cigarette is ignited at one end and allowed to smoulder; its smoke is inhaled from the other end, which is held in or to the mouth and in some cases a cigarette holder may be used as well...

s, airline tickets, tires, trucks, etc. and are usually included in the price of the item—not listed separately like sales tax

Sales tax

A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....

es usually are. To minimize tax accounting complications, the excise tax is usually imposed on quantities like gallons of fuel, gallons of wine or drinking alcohol, packets of cigarettes, etc. and are usually paid initially by the manufacturer or retailer. All excise taxes are, of course, passed on to the consumer who eventually consumes the product. The price the item is eventually sold for is not generally considered in calculating the excise taxes. Income tax

Income tax

An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...

es, value added taxes (VATS), sales tax

Sales tax

es, and transfer tax

Transfer tax

A transfer tax is a tax on the passing of title to property from one person to another.In a narrow legal sense, a transfer tax is essentially a transaction fee imposed on the transfer of title to property. This kind of tax is typically imposed where there is a legal requirement for registration of...

es are all examples of other event taxes but are typically not called excise taxes (in the U.S.) because of the different ways they are assessed. In the U.S. essentially the only taxes called excise taxes are the taxes on quantities of enumerated items (whiskey, wine, tobacco, gasoline, tires, etc.). Other events may technically be considered excise taxes but are seldom collected under that name. An example of a state of being tax is an ad valorem property tax

Property tax

A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...

—which is not an excise. Customs or tariffs are based on the property (usually imported goods) as a state of being or Ad-valorem taxes and are also typically not called excise taxes. Excise taxes are collected by producers and retailers and paid to the Internal Revenue Service

Internal Revenue Service

The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...

or other state and/or local government tax collection agency. Historical federal excise tax collections to 1945 are listed in the Historical Statistics of the United States and more recent federal excise tax data is listed in the White House historical tables--Table 2.1

U.S. 2010 Excise Tax Rates
Item	Tax Rate	Measure
General Fund Excise taxes
Small Cigarettes	$1.01	pkg 20
Cigars, large	$0.40	ea. cigar
Distilled Alcohol 80 proof	$2.14	750 ml
Wine 14% Alcohol or Less	$0.21	750 ml
Wine 14 to 21%	$0.31	750 ml
Wine 21 to 24%	$0.62	750 ml
Wine Sparkling	$0.67	750 ml
Wine Carbonated	$0.65	750 ml
Hard Cider	$0.04	750 ml
Beer	$0.05	12 oz
Pistols and Revolvers	10%	price
Other Firearms and Ammunition	11%	price
Tanning Salon	10%	price
Gas guzzler 21.5-22.5 mpg	$1,000.00	vehicle
Gas guzzler 12.5-13.5 mpg	$6,400.00	vehicle
Telephone Calls	3%	local
Wagering excise tax	2.50%	wager
Black Lung Disability Trust
Coal mined	$1.10	ton
Coal mined	4.40%	price
Coal open pit	$0.55	ton
Coal open pit	4.40%	price
Highway Trust Fund
Gasoline	$0.183	gallon
Diesel	$0.243	gallon
Alcohol fuels	$0.183	gallon
LPG fuel	$0.183	gallon
LNG fuel	$0.243	gallon
CNG fuel	$0.183	gallon
Tires over 3,500 lb. rated wt.	$0.09	10# rated wt
Heavy Trucks	12%	price
55,000–75,000 lbs. capacity	$100.00	truck/yr.
each 1000# over 55,000	$22.00	truck/yr.
over 75,000 #	$550.00	truck/yr.
Leaking Underground Storage Tank Trust
Leaking Gas storage	.1 cent	gallon
Vaccine Injury Compensation Trust Fund Excise
Vaccine	$0.75	dose
Water Transportation Passenger excise tax
Ship voyage	$3.00	passenger
Land and Water Conservation Trust Fund
Ship fuel	$0.20	gallon
Oil Spill fund
Oil	$0.08	barrel
Harbor Maintenance Trust Fund
Harbor Maintenance	0.13%	cargo
Sport Fish Restoration & Boating Trust Fund
Sport Fishing gear	10%	price
Boat Gasoline	$0.183	gallon
Boat Diesel	$0.243	gallon
Airport and Airway Trust Fund
Airline Ticket	7.50%	price
International Ticket	$16.30	ea.
Air Cargo	6.25%	charges
Comm. Aviation kerosene	$0.043	gallon
Jet Fuel	$0.218	gallon
Aviation gasoline	$0.194	gallon
-----------------------------------------------------------------------------
Notes: Some Excise Excise Excise tax in the United States is a indirect tax on listed items. Excise taxes can be and are made by federal, state and local governments and are far from uniform throughout the United States... taxes are assigned to Trust Funds and are collected for and “dedicated” to the Trust.

For purposes of the U.S. Constitution, an excise tax can be defined as any indirect tax

Indirect tax

The term indirect tax has more than one meaning.In the colloquial sense, an indirect tax is a tax collected by an intermediary from the person who bears the ultimate economic burden of the tax...

, or event tax. An excise means any tax other than: (1) a property tax

Property tax

or Ad-valorem tax by reason of its ownership; (2) a tax per head tax or capitation tax by being present (very rare in the U.S.); (3) an income tax

Income tax

paid directly to the government on income; or a (4) sales tax

Sales tax

which is paid on all sales except specifically exempted items. An excise is imposed on listed specific taxable events or products and are usually not collected or paid directly by the consumer--a direct tax

Direct tax

The term direct tax generally means a tax paid directly to the government by the persons on whom it is imposed.-General meaning:In the general sense, a direct tax is one paid directly to the government by the persons on whom it is imposed...

. Excise taxes are collected by the producer or retailer and paid by them to the Internal Revenue Service

Internal Revenue Service

, state or local tax agency. Of course the consumer ultimately pays the excise tax which is added to the price of the product when it is sold. Often sales taxes are collected as a percentage of the cost of the product and its excise tax--a tax on a tax.

Traditionally the Federal government has left property tax

Property tax

es and sales tax

Sales tax

es to the states and local governments for their revenue. Tariffs or Customs

Customs

duties on imported goods are essentially the only property tax imposed by the U.S. Federal government. Tariffs can only be set by the Federal government and not by any state or local jurisdiction. For U.S. constitutional law purposes, a customs duty or tariff is nominally in a separate category from an excise tax. Excise taxes can be (and are) set by other government tax jurisdictions like: federal, states and local.

In the United States, the term "excise" usually means: any tax other than a sales tax

Sales tax

, property tax

Property tax

, capitation

Poll tax

A poll tax is a tax of a portioned, fixed amount per individual in accordance with the census . When a corvée is commuted for cash payment, in effect it becomes a poll tax...

tax or income tax

Income tax

(i.e., a direct tax

Direct tax

in the constitutional law sense). Many taxes are simply called an excise tax in the statute imposing that tax (an excise in the statutory law sense) even though they could more accurately be called some other kind of tax. A collection of different taxes have accumulated over the years under the excise tax classification.

Often trust funds do not collect enough taxes because of assumptions that the politicians made in setting the excise tax rates and allowable trust fund projects result in underfunding. Changing consumer purchases have made the original assumptions wrong which may also result in underfunding. Because many of the funds are allocated to repay bonds and other long term projects, they often require an infusion of general funds to stay solvent. Long term adjustments of tax rates or a less extensive list of allowable trust fund projects to keep the funds solvent require bi-partisan agreements, which are obviously rare.

The excise taxes on alcoholic beverages, tobacco products and firearms are administered under the Alcohol and Tobacco Tax and Trade Bureau

Alcohol and Tobacco Tax and Trade Bureau

The Alcohol and Tobacco Tax and Trade Bureau, statutorily named the Tax and Trade Bureau and frequently shortened to TTB, is a bureau of the United States Department of the Treasury....

(TTB) in the United States Department of the Treasury

United States Department of the Treasury

The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...

. The total excise taxes on gasoline, diesel etc. for each state have been calculated. The differing excise taxes in each state on fuels are given in the wikipedia article Fuel taxes in the United States
Fuel taxes in the United States
The United States federal excise tax on gasoline, as of February 2011, is 18.4¢/gal and 24.4¢/gal for diesel fuel. In January 2011, motor gasoline taxes averaged 48.1¢/gal and diesel fuel taxes averaged 53.1¢/gal, which accounted for 14% of the price of gasoline and 15% of the price of diesel.As...

. The differing excise taxes in each state on cigarettes are given in the wikipedia article Cigarette taxes in the United States
Cigarette taxes in the United States
In the United States cigarettes are taxed at both the federal and state levels, in addition to any state and local sales taxes and local cigarette-specific taxes. Cigarette taxation has appeared throughout American history and still presents itself prominently today. Overall public health officials...

.

Federal Trust Fund excise tax collections are often remitted to each state by complicated allocation plans. The Highway Trust fund moneys are split between highways and transit systems. The Highway Account normally receives about 85% of all highway trust fund taxes, and the Mass Transit Account receives about 15% of all Highway Trust Fund excise tax collections. The Highway Trust Fund may well require tax rate adjustments to stay solvent and make up for the increased car mileage dictated by the EPA or the increased use of untaxed electric vehicles. As fuel prices increase, there is a slow decrease in gallons of fuel bought as vehicles are made more efficient and/or travel smaller distances all of which reduce Highway Trust Fund collections. Federal funding of the Highway Trust Fund is restricted for use on capital expenditures, such as construction and reconstruction of roads, bridges or tunnels, or payment of bonds sold to finance the work. The bulk of funding is for specific programs set up to channel aid to the States for a variety of uses, such as providing capital funding for the Nation’s most heavily used roads, maintaining interstates, and fixing bridges. Regular maintenance on non-interstate roads, including pothole patching and snowplowing, must be funded through other sources. Funding often requires a partial dollar match by the states. The Mass Transit Account which gets its funding from a fraction of the excise taxes imposed on fuels, etc. has similar restrictions.

Statutory law

The term "excise" also has a statutory law meaning. Generally, in the United States any statute that imposes a tax specifically denominated as an "excise" is an excise tax law. U.S. Federal statutory excises are (or have been) imposed under Subtitle D ("miscellaneous excise taxes") and Subtitle E ("Alcohol, Tobacco, and Certain Other Excise Taxes") of the Internal Revenue Code

Internal Revenue Code

The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...

, through , relating to such things as luxury passenger automobiles, heavy trucks and trailers, "gas guzzler" vehicles, tires, petroleum products, coal, vaccines, recreational equipment, firearms (see National Firearms Act

National Firearms Act

The National Firearms Act , 73rd Congress, Sess. 2, ch. 757, , enacted on June 26, 1934, currently codified as amended as , is an Act of Congress that, in general, imposes a statutory excise tax on the manufacture and transfer of certain firearms and mandates the registration of those firearms. The...

), communications services (see Telephone federal excise tax

Telephone federal excise tax

The federal telephone excise tax is a statutory federal excise tax imposed under the Internal Revenue Code in the United States under on amounts paid for certain "communications services." The tax was to be imposed on the person paying for the communications services but, under , is collected...

), air transportation, policies issued by foreign insurance companies, wagering, water transportation, removal of hard mineral resources from deep seabeds, chemicals, certain imported substances, non-deductible contributions to certain employer plans, and many other subjects. The Commonwealth of Massachusetts

Massachusetts

The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...

charges what it calls an "excise tax" on all vehicles, even though this is, in fact, an ad valorem tax

Ad valorem tax

An ad valorem tax is a tax based on the value of real estate or personal property. It is more common than a specific duty, a tax based on the quantity of an item, such as cents per kilogram, regardless of price....

.

Excise duties usually have one or two purposes: to raise revenue and to discourage particular behavior or purchase of particular items. Taxes such as those on sales of fuel

Fuel

Fuel is any material that stores energy that can later be extracted to perform mechanical work in a controlled manner. Most fuels used by humans undergo combustion, a redox reaction in which a combustible substance releases energy after it ignites and reacts with the oxygen in the air...

, alcohol

Alcohol

In chemistry, an alcohol is an organic compound in which the hydroxy functional group is bound to a carbon atom. In particular, this carbon center should be saturated, having single bonds to three other atoms....

and tobacco

Tobacco

Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...

are often "justified" on both grounds. Some economists suggest that the optimal revenue raising taxes should be levied on sales of items having an inelastic demand

Price elasticity of demand

Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price...

, while behavior altering taxes should be levied where demand is elastic

Elasticity (economics)

In economics, elasticity is the measurement of how changing one economic variable affects others. For example:* "If I lower the price of my product, how much more will I sell?"* "If I raise the price, how much less will I sell?"...

. Most items on the excise tax lists are relatively inelastic "addictions" with only long term elasticity.

One of the most common excises in the United States is the cigarette tax

Cigarette taxes in the United States

In the United States cigarettes are taxed at both the federal and state levels, in addition to any state and local sales taxes and local cigarette-specific taxes. Cigarette taxation has appeared throughout American history and still presents itself prominently today. Overall public health officials...

imposed by both the states and federal governments. This tax is simply a excise tax applied to each pack of cigarettes. Specifically, the federal government uniformly charges an excise tax of $1.01 for a standard pack of 20 cigarettes. On top of the federal tax, all 50 states levy a different cigarette tax that ranges from $0.17 per pack in Missouri

Missouri

Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...

to $4.35 per pack in New York

New York

New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

. Overall, the excise taxes constitute most of the retail cost of cigarettes. Cigarette taxes can be avoided in some jurisdictions if the consumer purchases loose tobacco

Tobacco

Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...

and cigarette paper separately or by purchase of cigarettes from lower taxed states.

Excise taxes can be imposed and collected at the point of production or import

Import

The term import is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". Thus...

ation, or at the point of sale and then remitted to the Internal Revenue Service

Internal Revenue Service

or state or local taxing agency. Often some excise taxes are collected by the federal government and then remitted to the states on a partially matching basis to pay for particular items like interstate highway construction, airport construction or bridge repairs. Excise taxes are usually waived or refunded on goods being export

Export

The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...

ed, so as to encourage exports. Smugglers and other tax avoiders will often seek to obtain items at a point at which they are not taxed or taxed much lower and then later sell or use them at a price lower than the post-tax price in their jurisdiction.

For similar items, excise duties are the same for imported and domestically produced goods; if the tax is different, then there is an explicit or implicit customs duty or tariff.

An unusual example of a state "excise" tax is found in the State of Hawaii

Hawaii

Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...

. In lieu of a sales tax

Sales tax

, the State of Hawaii imposes a tax called a General Excise Tax, or GET, on all business activity in the State. The GET is charged at a rate of 4% for most businesses and 0.5% for wholesalers. The tax is imposed on all business entities, so in essence, the tax is collected at every level of production (material supplier to manufacturer to wholesaler to retailer.) The GET is also charged on all business service activity such as real estate agent commissions, lawyer fees and the like. A more accurate tax term would be a value added tax

Value added tax

A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...

or VAT. With Hawaii's industry heavily dependent on tourism and tourist spending, the State regularly raises nearly half its government revenues through the imposition of the GET. Hawaii's GET has been criticized for having a disproportionate impact on low-income families, owing to the fact it is charged on intermediary transactions (such as those between wholesaler and retailer) as well as services, resulting in a pyramiding effect as costs rise in relation to final retail prices.

Excise Tax Enforcement

The Bureau of Alcohol, Tobacco, Firearms and Explosives

Bureau of Alcohol, Tobacco, Firearms and Explosives

The Bureau of Alcohol, Tobacco, Firearms and Explosives is a federal law enforcement organization within the United States Department of Justice...

(ATF), formed in 1886, is a federal law enforcement organization within the United States Department of Justice

United States Department of Justice

The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...

(DOJ). Its responsibilities include the investigation and prevention of federal offenses involving the unlawful use, manufacture, and possession of firearms and explosives; acts of arson and bombings; and illegal manufacturing and trafficking of alcohol and tobacco products that avoid paying the federal excise taxes on these products.

The Internal Revenue Service

Internal Revenue Service

(IRS) within the United States Department of the Treasury

United States Department of the Treasury

The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue...

is responsible for collecting the over one million excise tax returns that collects almost $70 billion dollars in excise taxes. IRS publication 510 lists all the forms, rates, rules etc. on federal excise tax collection. The IRS is authorized to sue people who violate the excise tax rules and have them incarcerated.

Commentary on excises

Samuel Johnson

Samuel Johnson , often referred to as Dr. Johnson, was an English author who made lasting contributions to English literature as a poet, essayist, moralist, literary critic, biographer, editor and lexicographer...

's A Dictionary of the English Language
A Dictionary of the English Language
Published on 15 April 1755 and written by Samuel Johnson, A Dictionary of the English Language, sometimes published as Johnson's Dictionary, is among the most influential dictionaries in the history of the English language....

defined excise in 1755 as A hateful tax levied upon commodities, and adjudged not by the common judges of property, but wretches hired by those to whom excise is paid.

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.