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Thomas Andersen (Courtesy photo)
Excise taxes have evolved far beyond their early use as simple revenue tools. Today, they are strategic levers for shaping consumer behavior, funding targeted programs and addressing social or environmental costs. From funding infrastructure with fuel levies to discouraging tobacco use with sin taxes, excise duties have long been tools of fiscal policy and social regulation. For example, the U.S. federal gasoline tax is 18.4 cents per gallon, which is included in the pump price.
This article explains how various excise taxes function, with examples from mainstream industries, and then examines how these taxes are applied within the regulated cannabis sector.
Part 1: Excise taxes in general
What are excise taxes?
Many states cap sales and use tax rates by law, limiting revenue options.
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