The State places a ten cent tax on every gallon of gasoline used by consumers. What type of tax is this an example of:

a.

sales tax

c.

income tax

b.

excise tax

d.

customs duty

Gasoline is a fuel. Like all fuels, there is also an excise tax on Gasoline.

Other typical examples of excise taxes are the taxes on alcohol and tobacco.

Fun fact! Excise tax is sometimes referred to as sin tax.