What is excise tax?

A tax charged on goods and services that are usually seen as socially harmful or luxury goods. Vehicles, alcohol, gas, airline tickets, indoor tanning, etc., are subject to excise tax. This tax is also called the “sin tax” because the items sold are considered harmful and contribute billions in federal and state revenue every year. 

These highh taxes help decrease the purchase and use of these items compared to other harmless products in the market. Businesses selling such items have to pay excise taxes at both the state and federal levels. You also need to register with the Alcohol and tobacco Tax and Trade Bureau if you want to sell alcohol or tobacco failing which you may have to pay a fine of $10,000 or more depending on the number of days you’ve been without registration.