Taxes & Tax Rates for State Excise tax

Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the final price of products and services, and are often hidden to consumers.

There are also excise taxes on activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax programs.

One of the major components of the excise program is motor fuel.

Excise taxes are special taxes on specific goods or activities—such as gasoline, tobacco or gambling—rather than general tax bases such as income or consumption.

Publication 510 (2010), Excise Taxes 

An excise or excise tax (sometimes called a duty of excise or a special tax) may be defined broadly as an inland tax on the production or sale of a good produced within the country. Excises are distinguished from customs duties, which are taxes on importation. Excises, whether broadly defined or narrowly defined, are inland taxes, whereas customs duties are border taxes.

An excise is an indirect tax, meaning that the producer or seller who pays the tax to the government is expected to try to recover the tax by raising the price paid by the buyer.

Excises are typically imposed in addition to another indirect tax such as a sales tax or Value Added Tax (VAT).

A excise is distinguished from a sales tax or VAT in three ways:

• an excise typically applies to a narrower range of products
• an excise is typically heavier, accounting for higher fractions (sometimes half or more) of the retail prices of the targeted products
• an excise is typically specific (so much per unit of measure; e.g. so many cents per gallon), whereas a sales tax or VAT is ad valorem, proportional to value (a percentage of the price in the case of a sales tax, or of value added in the case of a VAT).

Overall excise taxes account for less than 10 percent of all federal receipts. All 50 states and many local municipalities levy excise taxes of various kinds. Studies show excise taxes are disproportionately borne by low-income taxpayers, making them one of the most regressive components of the U.S. tax system.

State Excise Taxed Products and Rates

Registration for certain activities. You are required to be registered for certain excise tax activities, such as blending of gasoline, diesel fuel, or kerosene outside the bulk transfer/terminal system. See the instructions for Form 637 for the list of activities for which you must register.

Also see Registration Requirements under Fuel Taxes in chapter 1 for information on registration for activities related to fuel. Each business unit that has, or is required to have, a separate employer identification number must be registered.

To apply for registration, complete Form 637 and provide the information requested in its instructions. If your application is approved, you will receive a Letter of Registration showing the activities for which you are registered, the effective date of the registration, and your registration number. A copy of Form 637 is not a Letter of Registration.