An Excise Tax is a tax on a specific tangible good or service. Excise Tax is included in the cost of the goods that you buy.

An example of an Excise Tax is the tax on luxury goods, like boats, or the tax on cigarettes, marijuana and alcohol.  There is also an Excise Tax on gasoline.

Some Excise Taxes are a percentage of the purchase price of a tangible good or service. Other Excise Taxes are a fixed amounts regardless of the cost of the item.

An Excise Tax can be imposed by federal, state or local governments.  Excise Taxes are not paid directly by the consumer and as such often remain hidden in the price of a product or service, rather than being listed as a separate tax.