Excise Tax

1. An indirect tax charged on the sale of a particular good.

2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the Internal Revenue Service (IRS).

1. Excise taxes are considered an indirect form of taxation because the government does not directly apply the tax. An intermediary, either the producer or merchant, is charged and then must pay the tax to the government. These taxes can be categorized in two ways:

- Ad Valorem: A fixed percentage is charged on a particular good.
- Specific: A fixed dollar amount dependent upon the quantity purchased is charged.

2. Here are some examples of situations in which excises taxes are charged on transactions in retirement accounts:

- A 6% excise tax applies to excess IRA contributions that are not corrected by the applicable deadline.
- A 10% excise tax applies to distributions from an IRA, qualified plan or 403(b) account that occur before the participant reaches age 59.5.
- A 50% excise tax applies to required minimum distribution amounts not withdrawn by the applicable deadline (referred to as an excess-accumulation penalty).

Investment dictionary. . 2012.

Look at other dictionaries:

  • excise tax — n: excise Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • Excise Tax — L’Excise Tax est un impôt indirect créé au Royaume Uni, créé lors de la Première Révolution anglaise, appelé aussi « droit de timbre », qui s’est décliné pour de très nombreux produits, en particulier à l’importation. Sa perception… …   Wikipédia en Français

  • excise tax — Federal or state tax placed on the sale or manufacture of a commodity, typically a luxury item e.g., alcohol. Bloomberg Financial Dictionary * * * excise tax excise tax ➔ tax1 * * * excise tax UK US noun [C or U] US TAX ► EXCISE DUTY(Cf. ↑ …   Financial and business terms

  • excise tax — A tax which does not fall within the classification of a poll tax or a property tax, and embraces every form of tax burdens not laid directly upon persons or property. Idaho Gold Dredging Co. v Balderston, 58 Idaho 692, 78 P2d 105. A tax imposed… …   Ballentine's law dictionary

  • excise tax — noun a tax that is measured by the amount of business done (not on property or income from real estate) (Freq. 1) • Syn: ↑excise • Derivationally related forms: ↑excise (for: ↑excise) • Hypernyms: ↑ …   Useful english dictionary

  • excise tax — A tax imposed on the performance of an act, the engaging in an occupation, or the enjoyment of a privilege. Rapa v. Haines, Ohio Com.Pl., 101 N.E.2d 733, 735. A tax on the manufacture, sale, or use of goods or on the carrying on of an occupation… …   Black's law dictionary

  • excise tax — noun Any of various taxes levied on the production or sale of certain goods, especially on luxuries, tobacco, alcohol etc. See Also: exciseman …   Wiktionary

  • excise tax —    Auhau helu waiwai …   English-Hawaiian dictionary

  • Excise tax in the United States — Excise tax, sometimes called an excise duty, is a type of tax. In the United States, the term excise means: (A) any tax other than a property tax or capitation (i.e., an indirect tax, or excise, in the constitutional law sense), or (B) a tax that …   Wikipedia

  • Excise Tax Reduction Act of 1954 — The United States Excise Tax Reduction Act of 1954 actually temporarily extended the 1951 excise tax increases (through March 31, 1955), but also reduced excise tax rates on, among other things, telephones, admissions, and jewelry …   Wikipedia

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