ANSWERS: 1
  • Federal excises are a tax that most people have never heard of or seen, but it affects nearly everyone on a daily basis. Most of our favorite products, such as gasoline, are hit with a federal excise tax.

    History

    Federal excise taxes were one of the only ways the federal government could raise operational funds until the passage of the 16th amendment, which authorized the federal income tax, according to the U.S. Treasury.

    Identification

    A federal excise tax is a tax placed on a specific item, such as a computer, according to the Internal Revenue Service.

    Features

    Most people never see the true cost of an excise tax because manufacturers and producers almost always include the cost of it in the price of the item, reports the IRS. The "gas excise tax," for example, is an important part of the price of gasoline, but rarely do people see the precise amount of the gas tax.

    Misconceptions

    An excise tax not only applies to physical goods but also recreational activity, such as gambling and trucks that use public highways, states the IRS.

    Fun Fact

    The IRS often offers refunds for certain excise taxes. In 2006, for example, the IRS offered a refund on the long-distance-calling excise tax to over 140 million people.

    Source:

    United States Department of the Treasury

    Internal Revenue Service: Excise Tax

    Internal Revenue Service: Telephone Excise Tax Refund

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