what is the difference between an excise tax and a sales tax quizlet?
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sales taxes are calculated as a percentage of the price paid, while excise taxes are levied on a per-unit basis.
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The main difference between customs and excise taxes, is the location of origin for the item being taxed. Customs taxes apply to items that enter the country from another country. Wheres, excise taxes are applied to items manufactured and sold in this country.
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The overall federal tax system is progressive, with total federal tax burdens a larger percentage of income for higher-income households than for lower-income households. ... By contrast, excise taxes are regressive, as are payroll taxes for Social Security and Medicare.
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You wouldn't pay VAT or sales tax, but you may need to pay a "use tax". From Wikipedia: A use tax is a type of tax levied in the United States by numerous state governments. ... Individuals rarely comply with this requirement to pay use tax, but it may be more important for a business to do so.
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The federal government charges excise taxes on the sale or use of a wide variety of products. An excise tax isn't deductible if it's for a personal expense. You can deduct as a business expense excise taxes that are ordinary and necessary expenses of carrying on your trade or business.
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The customs and excise taxes are often confused. The main difference between customs and excise taxes, is the location of origin for the item being taxed. Customs taxes apply to items that enter the country from another country. ... Conversely, the excise tax is applied to items purchased in this country.
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The published rates of vehicle excise duty are the same as the cost of the relevant tax disc. It follows that there is no VAT on VED. ... It's a couple of the taxes you pay if you buy a new car.
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Although sometimes referred to as a tax, excise is specifically a duty; tax is technically a levy on an individual (or more accurately, the assessment of what that amount might be), while duty is a levy on particular goods.
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California's sales tax generally applies to the sale of merchandise, including vehicles, in the state. California's use tax applies to the use, storage, or other consumption of those same kinds of items in the state.
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To calculate sales tax, first convert the sales tax from a percentage to a decimal by moving the decimal 2 places to the left. Then multiply the cost of the item or service by that decimal to get the sales tax. Remember to add the sales tax to the cost of the item or service to get the total amount you will pay for it.
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Exempt sales are based on the business or entity making the purchase. ... Refer to this guide for common reasons that a business would be exempt from paying sales tax. Non-taxable sales. Non-taxable sales are based on the product or service being sold.
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The major types of taxes are income taxes, sales taxes, property taxes, and excise taxes.
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There are two main differences to be aware of: 1. Sales and purchases exempt from VAT must be included in the total sales (box 6) and purchases (box 7). Items outside the scope of VAT don't go on the VAT return (you wouldn't include staff wages or employment tax payments).
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GST and VAT difference In many ways, GST and VAT are simply two words for the same tax. You can think of VAT as a type of Goods and Services Tax or GST as a type of Value Added Tax, but they essentially mean the same thing.
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Provincial sales tax (PST) is a retail sales tax that applies when a taxable good or service is purchased, acquired or brought into B.C., unless a specific exemption applies. The PST generally applies to: The purchase or lease of new and used goods in B.C. Goods brought, sent or delivered into B.C. for use in B.C.
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A tax is a charge levied by a government to raise revenue. The main types of taxes include. Income tax – a percentage of income. Corporation tax – a percentage of a firm's profit. Sales tax/VAT – an indirect tax on the sale of goods.
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The individual and corporate income taxes and the estate tax are all progressive. By contrast, excise taxes are regressive, as are payroll taxes for Social Security and Medicare. Regressivity can be seen over some range of income (figure 2).