For purposes of the U.S. Constitution, an excise tax can be broadly defined as any
indirect tax (usually, a tax on an event). In this sense, an excise means any tax
other than: (1) a
property tax or ad valorem tax because of its ownership; (2) a
tax per head tax or capitation tax by being present (very rare in the United States). In this broad sense, income taxes,
value added taxes (VATs),
sales taxes, and
transfer taxes are examples of other excise taxes but are typically not called excise taxes (in the United States) because of the different ways they are imposed. In the United States, the only excise taxes are the taxes on quantities of enumerated items (whiskey, wine, tobacco, gasoline, tires, etc.). Other taxes on specific events may technically be considered excise taxes in the broad sense but may or may not be collected under the name "excise tax", where the term is used in a different, more narrow sense. In the more narrow sense, taxes denominated as "excise" taxes are usually taxes on events, such as the purchase of a quantity of a particular item like
gasoline,
diesel fuel,
beer,
liquor,
wine,
cigarettes,
airline tickets,
tires,
trucks, etc. These taxes are usually included in the item's price, not listed separately like sales taxes usually are. To minimize tax accounting complications, the excise tax is generally imposed on quantities like gallons of fuel, wine or
drinking alcohol, packets of cigarettes, etc. It is usually paid initially by the manufacturer or retailer. The burdens of excise taxes are often passed on to the consumer, who eventually
consumes the product. The price for which the item is ultimately sold is not generally considered in calculating the excise tax amount. An example of a
state of being tax is an
ad valorem property tax—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 (IRS) or other state or local government tax collection agency. Historical federal excise tax collections to 1945 are listed in the
Historical Statistics of the United States An excise is imposed on listed specific taxable events or products and is usually not collected or paid directly by the consumer. Excise taxes are collected by the producer or retailer and delivered to the IRS, state or local
tax agency. The producer can usually pass at least some of the excise tax burden to the consumer, the amount of which is added to the price of the product when it is sold. The degree to which consumers and producers will share the burden, called
tax incidence, depends upon the
price elasticities of
supply and demand. Often, sales taxes are collected as a percentage of the cost of the product, including its excise tax—a tax on a tax. Traditionally, the federal government has left property and sales taxes to the states and local governments for their revenue.
Tariffs or customs duties on imported goods are essentially the only property taxes imposed by the
U.S. federal government. Tariffs can be set only by the federal government, not by any state or local jurisdiction. A customs duty or tariff is nominally separate from an excise tax for U.S. constitutional law purposes. Excise taxes can be (and are) set by federal, state, and local jurisdictions. Many taxes are 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. Different taxes have accumulated over the years under the excise tax classification. Often, trust funds do not collect enough taxes because the legislators assume setting the excise tax rates and allowable trust fund projects results in underfunding. Changing consumer purchases have wronged the original assumptions, which may result in underfunding. Because many 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 rare. The excise taxes on alcoholic beverages, tobacco products and firearms are administered under the
Alcohol and Tobacco Tax and Trade Bureau (TTB) in the
United States Department of the Treasury. The total excise taxes on gasoline, diesel etc. for each state have been calculated. Federal Trust Fund excise tax collections are often remitted to each state by complicated allocation plans. The
Highway Trust Fund revenue is 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 increasing
fuel economy standards dictated by the
Environmental Protection Agency or the increased use of untaxed
plug-in electric vehicles. As fuel prices rise, there is a slight decrease in gallons of fuel bought as vehicles are made more efficient and/or travel shorter distances, all of which reduce Highway Trust Fund collections. Federal funding of the Highway Trust Fund is restricted for capital expenditures, such as constructing and reconstructing roads, bridges, or tunnels or paying bonds sold to finance the work. The bulk of funding is for specific programs set up to channel aid to the states for various uses, such as providing capital 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==