Excise taxes

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Excise taxes, also known as selective sales or differential commodity taxes, are levied for the sales of specific goods or services. Excise taxes are commonly applied to items such as motor fuel, alcohol and tobacco.[1][2][3][4]

Excise taxes are considered indirect taxes because they are not charged directly to individuals. In most cases, the excise tax is paid by the producer or seller of an item. The cost of the tax is included in the sale price of the item and then passed on to the consumer. Generally speaking, excise taxes take one of two forms. For ad valorem excise taxes, a specific rate is levied for a certain item or service. For unit excise taxes, a set dollar amount per unit produced or sold is charged for the item.[1][2][3][4]

Excise taxes are levied at all levels of government. Revenues from such taxes are relatively small, albeit significant. In 2010, excise taxes accounted for less than 10 percent of total federal tax revenues. Meanwhile, at the state level, excise taxes accounted for approximately 20 percent of total tax revenues.[3][5][6]

A notable feature of excise tax systems is that they can "promote social policy objectives while raising substantial revenues." For example, some argue that excise taxes on alcohol and tobacco products can limit the use of these items. Opponents argue that the aforementioned "social policy objectives" should not be taken into account in the development of tax policy because "taxation should have a neutral effect on the market." Some opponents also argue that excise taxes are regressive (i.e., lower-income individuals pay a greater share of their income toward these taxes than higher-income individuals).[3][6]

Common excise taxes, 2015

Motor fuel

The table below summarizes the excise tax rates for motor fuel in all 50 states, as well as the District of Columbia. Different rates apply to different types of fuel (i.e., gasoline, diesel and gasohol). In 2015, Pennsylvania levied the highest excise and total tax on gasoline at 50.5¢ per gallon. The total federal tax on gasoline is 18.4¢ per gallon.[7]

Fuel excise tax rates, 2015 (in cents per gallon)
State Gasoline Diesel Gasohol
Excise tax Other taxes Total tax Excise tax Other taxes Total tax Excise tax Other taxes Total tax
Alabama 16¢ 2¢ 18¢ 19¢ 0¢ 19¢ 16¢ 2¢ 18¢
Alaska 8¢ 0¢ 8¢ 8¢ 0¢ 8¢ 8¢ 0¢ 8¢
Arizona 18¢ 1¢ 19¢ 26¢ 1¢ 27¢ 18¢ 1¢ 19¢
Arkansas 21.5¢ 0.3¢ 21.8¢ 22.5¢ 0.3¢ 22.8¢ 21.5¢ 0.3¢ 21.8¢
California 36¢ 6.5¢ 42.5¢ 11¢ 27¢ 38¢ 36¢ 6.5¢ 42.5¢
Colorado 22¢ 0¢ 22¢ 20.5¢ 0¢ 20.5¢ 20¢ 0¢ 20¢
Connecticut 25¢ 0¢ 25¢ 54.5¢ 0¢ 54.5¢ 25¢ 0¢ 25¢
Delaware 23¢ 0¢ 23¢ 22¢ 0¢ 22¢ 23¢ 0¢ 23¢
District of Columbia 23.5¢ 0¢ 23.5¢ 23.5¢ 0¢ 23.5¢ 23.5¢ 0¢ 23.5¢
Florida 4¢ 24.525¢ 28.525¢ 4¢ 27.6¢ 31.6¢ 4¢ 24.525¢ 28.525¢
Georgia 7.5¢ 11.8¢ 19.3¢ 7.5¢ 13.8¢ 21.3¢ 7.5¢ 11.8¢ 19.3¢
Hawaii 17¢ 0¢ 17¢ 17¢ 0¢ 17¢ 17¢ 0¢ 17¢
Idaho 25¢ 1¢ 26¢ 25¢ 1¢ 26¢ 25¢ 1¢ 26¢
Illinois 19¢ 1.1¢ 20.1¢ 21.5¢ 1.1¢ 22.6¢ 19¢ 1.1¢ 20.1¢
Indiana 18¢ 0¢ 18¢ 16¢ 0¢ 16¢ 18¢ 0¢ 18¢
Iowa 21¢ 1¢ 22¢ 22.5¢ 1¢ 23.5¢ 19¢ 1¢ 20¢
Kansas 24¢ 1.03¢ 25.03¢ 26¢ 1.03¢ 27.03¢ 24¢ 1.03¢ 25¢
Kentucky 26.2¢ 1.4¢ 27.6¢ 23.2¢ 1.4¢ 24.6¢ 26.2¢ 1.4¢ 27.6¢
Louisiana 20¢ 0.125¢ 20.125¢ 20¢ 0.125¢ 20.125¢ 20¢ 0.125¢ 20.1¢
Maine 30¢ 0¢ 30¢ 31.2¢ 0¢ 31.2¢ 30¢ 0¢ 30¢
Maryland 30.3¢ 0¢ 30.3¢ 31.5¢ 0¢ 31.5¢ 30.3¢ 0¢ 30.3¢
Massachusetts 24¢ 0¢ 24¢ 24¢ 0¢ 24¢ 24¢ 0¢ 24¢
Michigan 19¢ 0¢ 19¢ 15¢ 0¢ 15¢ 19¢ 0¢ 19¢
Minnesota 28.5¢ 0.1¢ 28.6¢ 28.5¢ 0.1¢ 28.6¢ 28.5¢ 0.1¢ 28.6¢
Mississippi 18¢ 0.4¢ 18.4¢ 18¢ 0.4¢ 18.4¢ 18¢ 0.4¢ 18.4¢
Missouri 17¢ 0.3¢ 17.3¢ 17¢ 0.3¢ 17.3¢ 17¢ 0.3¢ 17.3¢
Montana 27¢ 0¢ 27¢ 27.75¢ 0¢ 27.75¢ 27¢ 0¢ 27¢
Nebraska 25.6¢ 0.9¢ 26.5¢ 25.6¢ 0.3¢ 25.9¢ 25.6¢ 0.9¢ 26.5¢
Nevada 23¢ 0.805¢ 23.805¢ 27¢ 0.75¢ 27.75¢ 23¢ 0.805¢ 23.8¢
New Hampshire 22.2¢ 1.625¢ 23.825¢ 22.2¢ 1.625¢ 23.825¢ 22.2¢ 1.625¢ 23.825¢
New Jersey 10.5¢ 4¢ 14.5¢ 13.5¢ 4¢ 17.5¢ 10.5¢ 4¢ 14.5¢
New Mexico 17¢ 1.875¢ 18.875¢ 21¢ 1.875¢ 22.875¢ 17¢ 1.875¢ 18.875¢
New York 8¢ 17.8¢ 25.8¢ 8¢ 16.05¢ 24.05¢ 8¢ 17.8¢ 25.8¢
North Carolina 37.5¢ 0.25¢ 37.75¢ 37.5¢ 0.25¢ 37.75¢ 37.5¢ 0.25¢ 37.75¢
North Dakota 23¢ 0¢ 23¢ 23¢ 0¢ 23¢ 23¢ 0¢ 23¢
Ohio 28¢ 0¢ 28¢ 28¢ 0¢ 28¢ 28¢ 0¢ 28¢
Oklahoma 16¢ 1¢ 17¢ 13¢ 1¢ 14¢ 16¢ 1¢ 17¢
Oregon 30¢ 0¢ 30¢ 30¢ 0¢ 30¢ 30¢ 0¢ 30¢
Pennsylvania 50.5¢ 0¢ 50.5¢ 64.2¢ 0¢ 64.2¢ 50.5¢ 0¢ 50.5¢
Rhode Island 32¢ 1¢ 33¢ 32¢ 1¢ 33¢ 32¢ 1¢ 33¢
South Carolina 16¢ 0.75¢ 16.75¢ 16¢ 0.75¢ 16.75¢ 16¢ 0.75¢ 16.75¢
South Dakota 22¢ 2¢ 24¢ 22¢ 2¢ 24¢ 22¢ 2¢ 24¢
Tennessee 20¢ 1.4¢ 21.4¢ 17¢ 1.4¢ 18.4¢ 20¢ 1.4¢ 21.4¢
Texas 20¢ 0¢ 20¢ 20¢ 0¢ 20¢ 20¢ 0¢ 20¢
Utah 24.5¢ 0¢ 24.5¢ 24.5¢ 0¢ 24.5¢ 24.5¢ 0¢ 24.5¢
Vermont 12.1¢ 19.87¢ 31.97¢ 28¢ 4¢ 32¢ 18.2¢ 13.77¢ 31.97¢
Virginia 16.2¢ 0¢ 16.2¢ 20.2¢ 0¢ 20.2¢ 16.2¢ 0¢ 16.2¢
Washington 37.5¢ 0¢ 37.5¢ 37.5¢ 0¢ 37.5¢ 37.5¢ 0¢ 37.5¢
West Virginia 20.5¢ 14.1¢ 34.6¢ 20.5¢ 14.1¢ 34.6¢ 20.5¢ 14.1¢ 34.6¢
Wisconsin 30.9¢ 2¢ 32.9¢ 30.9¢ 2¢ 32.9¢ 30.9¢ 2¢ 32.9¢
Wyoming 23.5¢ 1¢ 24.5¢ 23¢ 1¢ 24¢ 23¢ 1¢ 24¢
Federal rate 18.3¢ 0.1¢ 18.4¢ 24.3¢ 0.1¢ 24.4¢ 13¢ 0.1¢ 13.1¢
Note: For full annotations, see the source below.
Source: Tax Policy Center, "State Motor Fuel Tax Rates 2000-2011, 2013-2015," accessed September 30, 2015

Alcohol

The table below summarizes the excise tax rates for alcohol in all 50 states, as well as the District of Columbia. Different rates apply to different types of alcohol (i.e., liquor, wine and beer). In 2015, Washington levied the highest excise tax for liquor at $14.27 per gallon. For wine, Alaska levied the highest excise tax at $2.50 per gallon. Tennessee levied the highest excise tax for beer at $1.15 per gallon. The national medians for liquor, wine and beer were $3.75, $0.72 and $0.20 respectively.[8]

Federal excise tax rates on alcohol vary according to the alcohol type, proof and packaging unit. For complete details, see here.[9]

Alcohol excise tax rates, 2015 (in dollars per gallon)
State Liquor Wine Beer
Tax rate Does general sales tax apply? Tax rate Does general sales tax apply? Tax rate Does general sales tax apply?
Alabama 1 Yes $1.70 Yes $0.53 Yes
Alaska $12.80 N/A $2.50 N/A $1.07 N/A
Arizona $3.00 Yes $0.84 Yes $0.16 Yes
Arkansas $2.50 Yes $0.75 Yes $0.23 Yes
California $3.30 Yes $0.20 Yes $0.20 Yes
Colorado $2.28 Yes $0.28 Yes $0.08 Yes
Connecticut $5.40 Yes $0.72 Yes $0.24 Yes
Delaware $3.75 N/A $0.97 N/A $0.16 N/A
District of Columbia $1.50 -- $0.30 $0.09 Yes
Florida $6.50 Yes $2.25 Yes $0.48 Yes
Georgia $3.79 Yes $1.51 Yes $0.32 Yes
Hawaii $5.98 Yes $1.38 Yes $0.93 Yes
Idaho 1 Yes $0.45 Yes $0.15 Yes
Illinois $8.55 Yes $1.39 Yes $0.23 Yes
Indiana $2.68 Yes $0.47 Yes $0.12 Yes
Iowa 1 Yes $1.75 Yes $0.19 Yes
Kansas $2.50 -- $0.30 -- $0.18 --
Kentucky $1.92 Yes $0.50 Yes $0.08 Yes*
Louisiana $2.50 Yes $0.11 Yes $0.32 Yes
Maine 1 Yes $0.60 Yes $0.35 Yes
Maryland $1.50 Yes $0.40 -- $0.09 --
Massachusetts $4.05 Yes $0.55 Yes $0.11 Yes
Michigan 1 Yes $0.51 Yes $0.20 Yes
Minnesota $5.03 No $0.30 -- $0.15 --
Mississippi 1 Yes $0.35 Yes $0.43 Yes
Missouri $2.00 Yes $0.42 Yes $0.06 Yes
Montana 1 N/A $1.06 N/A $0.14 N/A
Nebraska $3.75 Yes $0.95 Yes $0.31 Yes
Nevada $3.60 Yes $0.70 Yes $0.16 Yes
New Hampshire 1 N/A 5 N/A $0.30 N/A
New Jersey $5.50 Yes $0.88 Yes $0.12 Yes
New Mexico $6.06 Yes $1.70 Yes $0.41 Yes
New York $6.44 Yes $0.30 Yes $0.14 Yes
North Carolina 1 Yes 2 $1.00 Yes $0.62 Yes
North Dakota $2.50 -- $0.50 -- $0.16 --
Ohio 1 Yes $0.32 Yes $0.18 Yes
Oklahoma $5.56 Yes $0.72 Yes $0.40 Yes
Oregon 1 N/A $0.67 N/A $0.08 N/A
Pennsylvania 1 Yes 5 Yes $0.08 Yes
Rhode Island $5.40 Yes $1.40 Yes $0.11 Yes
South Carolina $2.72 Yes $0.90 Yes $0.77 Yes
South Dakota $3.93 Yes $0.93 Yes $0.27 Yes
Tennessee $4.40 Yes $1.21 Yes $1.15 Yes
Texas $2.40 Yes $0.20 Yes $0.20 Yes
Utah 1 Yes 4 Yes $0.41 Yes
Vermont 1 No $0.55 Yes $0.27 Yes
Virginia 1 Yes $1.51 Yes $0.26 Yes
Washington $14.27 -- $0.87 Yes $0.26 Yes
West Virginia 1 Yes $1.00 Yes $0.18 Yes
Wisconsin $3.25 Yes $0.25 Yes $0.06 Yes
Wyoming 1 Yes 5 Yes $0.02 Yes
1"In 17 states, the government directly controls the sales of distilled spirits. Revenue in these states is generated from various taxes, fees, price mark-ups, and net liquor profits."
2"General sales tax applies to on-premise sales only."
3"Rhode Island tax rate scheduled to decrease to $3.75 on July 1, 2015."
4"Washington privatized liquor sales effective June 1, 2012."
5"All wine sales are through state stores. Revenue in these states is generated from various taxes, fees, price mark-ups, and net profits."
Note: For full annotations, see the source below.
Source: Tax Policy Center, "Alcohol Rates, 2000-2010, 2013-2015," accessed September 30, 2015

Cigarettes

The table below summarizes the excise tax rates for cigarettes in all 50 states, as well as the District of Columbia. National rankings range from one, indicating the highest tax, to 51, indicating the lowest. In 2015, New York levied the highest excise tax for cigarettes at $4.35 per pack. Meanwhile, Missouri levied the lowest such tax at $0.17 per pack. The national median cigarette excise tax in 2015 was $1.36 per pack.[10]

In his fiscal year 2016 budget proposal, President Obama advised a $1.95 federal tax on cigarettes in addition to state taxes.[11]

State cigarette taxes, 2015 (in cents per pack)
State Tax rate National ranking
Alabama 42.5¢ 47
Alaska 200¢ 12
Arizona 200¢ 12
Arkansas 115¢ 30
California 87¢ 33
Colorado 84¢ 34
Connecticut 340¢ 4
District of Columbia 250¢ 11
Delaware 160¢ 22
Florida 133.9¢ 27
Georgia 37¢ 48
Hawaii 320¢ 5
Idaho 57¢ 42
Illinois 198¢ 17
Indiana 99.5¢ 32
Iowa 136¢ 26
Kansas 79¢ 36
Kentucky 60¢ 40
Louisiana 36¢ 49
Maine 200¢ 12
Maryland 200¢ 12
Massachusetts 351¢ 2
Michigan 200¢ 12
Minnesota 290¢ 7
Mississippi 68¢ 37
Missouri 17¢ 51
Montana 170¢ 19
Nebraska 64¢ 38
Nevada 80¢ 35
New Hampshire 178¢ 18
New Jersey 270¢ 8
New Mexico 166¢ 21
New York 435¢ 1
North Carolina 45¢ 45
North Dakota 44¢ 46
Ohio 125¢ 29
Oklahoma 103¢ 31
Oregon 131¢ 28
Pennsylvania 160¢ 22
Rhode Island 350¢ 3
South Carolina 57¢ 42
South Dakota 153¢ 24
Tennessee 62¢ 39
Texas 141¢ 25
Utah 170¢ 19
Vermont 275¢ 9
Virginia 30¢ 50
Washington 302.5¢ 6
West Virginia 55¢ 44
Wisconsin 252¢ 10
Wyoming 60¢ 40
Note: For full annotations, see the source below.
Source: Tax Policy Center, "State Cigarette Taxes, 2015," accessed September 30, 2015

Common excise taxes, 2014

Motor fuel

The table below summarizes the excise tax rates for motor fuel in all 50 states, as well as the District of Columbia. Different rates apply to different types of fuel (i.e., gasoline, diesel and gasohol). In 2014, Pennsylvania levied the highest excise tax on gasoline at 40.7¢ per gallon. Meanwhile, California levied the highest total tax on gasoline at 46.5¢ per gallon (this includes both the excise tax and other applicable state taxes). The total federal tax on gasoline is 18.4¢ per gallon.[7]

Alcohol

The table below summarizes the excise tax rates for alcohol in all 50 states, as well as the District of Columbia. Different rates apply to different types of alcohol (i.e., liquor, wine and beer). In 2014, Washington levied the highest excise tax for liquor at $14.27 per gallon. For wine, Alaska levied the highest excise tax at $2.50 per gallon. Tennessee levied the highest excise tax for beer at $1.15 per gallon. The national medians for liquor, wine and beer were $3.75, $0.72 and $0.20 respectively.[8]

Federal excise tax rates on alcohol vary according to the alcohol type, proof and packaging unit. For complete details, see here.[9]

Cigarettes

The table below summarizes the excise tax rates for cigarettes in all 50 states, as well as the District of Columbia. National rankings range from one, indicating the highest tax, to 51, indicating the lowest. In 2014, New York levied the highest excise tax for cigarettes at $4.35 per pack. Meanwhile, Missouri levied the lowest such tax at $0.17 per pack. The national median cigarette excise tax in 2014 was $1.36 per pack.[10]

The federal government also levies an excise tax of $1.01 per pack. For more information, see here.[9]

Recent news

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See also

External links

Footnotes

  1. ↑ 1.0 1.1 Tax Policy Center, "Excise taxes," accessed October 20, 2014
  2. ↑ 2.0 2.1 Investopedia, "Excise Tax," accessed October 20, 2014
  3. ↑ 3.0 3.1 3.2 3.3 Tax Foundation, "Excise Taxes," accessed October 20, 2014
  4. ↑ 4.0 4.1 Internal Revenue Service, "Excise Tax," accessed October 20, 2014
  5. ↑ Tax Policy Center, "Type of Tax as a Share of Federal Revenues, 1934 - 2011," accessed October 20, 2014
  6. ↑ 6.0 6.1 Brunori, D. (2011). State Tax Policy: A Political Perspective. Washington, D.C.: The Urban Institute Press
  7. ↑ 7.0 7.1 Tax Policy Center, "State Motor Fuel Tax Rates 2000-2011, 2013-2015," accessed September 30, 2015
  8. ↑ 8.0 8.1 Tax Policy Center, "Alcohol Rates, 2000-2010, 2013-2015," accessed September 30, 2015
  9. ↑ 9.0 9.1 9.2 United States Department of the Treasury - Alcohol and Tobacco Tax and Trade Bureau, "Tax and Fee Rates," accessed October 21, 2014
  10. ↑ 10.0 10.1 Tax Policy Center, "State Cigarette Taxes, 2015," accessed September 30, 2015
  11. ↑ CSP Net, "Obama proposes cigarette tax increase," accessed October 9, 2015

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This article is curated by the Public Policy Desk:
 Jerrick Adams • Sarah Groat • Taylor Kempema • Adam Vaughn
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