How Do Excise Taxes Apply To Businesses?

How do excise taxes apply to businesses? An excise tax varies from state to state and may be used as an income tax, a sales tax, or a penalty. The term "excise tax" is used differently by different jurisdictions....

The term "excise tax" is used differently by different jurisdictions. Sometimes it is used in the context of a state sales tax, a state income tax, or other state tax imposed on businesses for the privilege of doing business in a particular state. For federal tax purposes, it is basically an additional tax or more akin to a penalty tax imposed on a variety of transactions and situations. There are certain provisions in US tax laws that are designed to prevent taxpayers from taking certain actions. If you run afoul of those provisions, one of the sticks that the US treasury uses is that they will impose additional taxes for those types of behaviors above and beyond the normal income tax. Those additional taxes are oftentimes called an excise tax.

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