An excise tax is a tax imposed on the manufacture, sale, or use of goods—such as cigarettes, fuel, or alcohol—or on an occupation—such as a license tax or an attorney occupation tax—or on an activity such as gambling or betting.
Excise taxes may be ad valorem (calculated by percentage) or specific (calculated per unit).
In California, excise taxes are levied on various goods and activities. For instance, the state imposes a significant excise tax on cigarettes and tobacco products, as well as on alcoholic beverages, which varies depending on the type of alcohol and its volume. Fuel also carries an excise tax, which is used to fund transportation-related projects. When it comes to activities, California charges an excise tax on gambling operations, such as card rooms and casinos. These taxes can be either ad valorem, meaning they are based on the value of the product or service, or specific, meaning they are a set amount charged per unit regardless of the price. There is no specific attorney occupation tax in California, but attorneys, like all other businesses, are subject to general business taxes and regulations. The revenue from excise taxes is typically earmarked for specific state funds and is used to finance related programs or services, such as public health initiatives, environmental protection, and infrastructure development.
