Excise Taxes

Definition

Excise Taxes. Taxes that are levied by the US Federal Government on the manufacture, sale, or consumption of specific items, usually on a per-unit basis rather than a percentage basis.

For example, cigarettes are taxed by the pack or carton, alcoholic beverages are taxed by the bottle, and gasoline is taxed by the gallon. Excise taxes are a type of commodity tax.