US Federal Excise Taxes 7-7-25

AI Overview

Here are the types of US federal excise taxes in 2025 based on the provided search results: 

Major Categories:

·       Fuels: Including gasoline, aviation gasoline, diesel fuel (including dyed and kerosene used in aviation), diesel-water fuel emulsion, and compressed natural gas (CNG).

·       Air Transportation: Taxes on passenger tickets, air cargo, and international travel facilities.

·       Tobacco: Taxes on cigarettes, cigars, chewing tobacco, pipe tobacco, snuff, and roll-your-own tobacco.

·       Alcohol: Taxes on distilled spirits, wine, and beer.

·       Other Goods and Services: This broad category includes items such as heavy trucks and highway tractors, indoor tanning services, tires, and firearms and ammunition. 

Other Specific Excise Taxes:

·       Environmental Taxes: These include taxes on domestic and imported petroleum products (Oil Spill Tax) and ozone-depleting chemicals.

·       Retail Taxes: Includes taxes on certain truck, trailer, semitrailer chassis and bodies, and tractors.

·       Ship Passenger Tax: Tax on transportation by water.

·       Foreign Insurance Tax: Taxes on policies issued by foreign insurers.

·       Manufacturers Taxes: Includes taxes on coal (underground and surface mined), taxable tires, gas guzzler tax, and vaccines.

·       Other Excise Taxes: This encompasses various taxes such as those on sport fishing equipment, electric outboard motors, bows, quivers, broadheads, points, arrow shafts, inland waterways fuel use tax, Patient-Centered Outcomes Research Fee, and repurchase of corporate stock. 

Classification of Excise Taxes:

Excise taxes can also be categorized based on their intended purpose: 

·       Sumptuary (or "Sin") taxes: These are aimed at discouraging certain activities with negative societal effects, like alcohol and tobacco consumption.

·       Regulatory taxes: Imposed to offset the costs of regulating public safety or discouraging activities with negative environmental impacts, such as taxes on pollution.

·       Benefit-based taxes (or user charges): Charge users of public goods (like highways or national parks) for their financing and maintenance.

·       Luxury taxes: Intended to raise revenue from higher-income households, though this type is less prevalent at the federal level currently. 

Important Notes for 2025:

·       Air Transportation Tax Increases: Federal excise tax rates for taxable air transportation of persons will increase effective January 1, 2025.

·       Patient-Centered Outcomes Research (PCOR) Fee: The fee for policy and plan years ending on or after October 1, 2024, but before October 1, 2025, is increased.

·       Arrow Shafts Tax Increase: The tax on arrow shafts is also increased for 2025.

·       Private Foundation Excise Taxes: There are proposals and legislation in 2025 that may affect excise taxes on private foundations, such as increased rates based on asset size. 

This information provides an overview of federal excise taxes in the US for 2025. It's important to consult official IRS resources and potentially seek professional advice for specific tax situations. 

AI Overview

Here are the types of US federal excise taxes in 2025 based on the provided search results:

Major Categories:

·       Fuels: Including gasoline, aviation gasoline, diesel fuel (including dyed and kerosene used in aviation), diesel-water fuel emulsion, and compressed natural gas (CNG).

·       Air Transportation: Taxes on passenger tickets, air cargo, and international travel facilities.

·       Tobacco: Taxes on cigarettes, cigars, chewing tobacco, pipe tobacco, snuff, and roll-your-own tobacco.

·       Alcohol: Taxes on distilled spirits, wine, and beer.

·       Other Goods and Services: This broad category includes items such as heavy trucks and highway tractors, indoor tanning services, tires, and firearms and ammunition. 

Other Specific Excise Taxes:

·       Environmental Taxes: These include taxes on domestic and imported petroleum products (Oil Spill Tax) and ozone-depleting chemicals.

·       Retail Taxes: Includes taxes on certain truck, trailer, semitrailer chassis and bodies, and tractors.

·       Ship Passenger Tax: Tax on transportation by water.

·       Foreign Insurance Tax: Taxes on policies issued by foreign insurers.

·       Manufacturers Taxes: Includes taxes on coal (underground and surface mined), taxable tires, gas guzzler tax, and vaccines.

·       Other Excise Taxes: This encompasses various taxes such as those on sport fishing equipment, electric outboard motors, bows, quivers, broadheads, points, arrow shafts, inland waterways fuel use tax, Patient-Centered Outcomes Research Fee, and repurchase of corporate stock.

Classification of Excise Taxes:

Excise taxes can also be categorized based on their intended purpose: 

·       Sumptuary (or "Sin") taxes: These are aimed at discouraging certain activities with negative societal effects, like alcohol and tobacco consumption.

·       Regulatory taxes: Imposed to offset the costs of regulating public safety or discouraging activities with negative environmental impacts, such as taxes on pollution.

·       Benefit-based taxes (or user charges): Charge users of public goods (like highways or national parks) for their financing and maintenance.

·       Luxury taxes: Intended to raise revenue from higher-income households, though this type is less prevalent at the federal level currently. 

Important Notes for 2025:

·       Air Transportation Tax Increases: Federal excise tax rates for taxable air transportation of persons will increase effective January 1, 2025.

·       Patient-Centered Outcomes Research (PCOR) Fee: The fee for policy and plan years ending on or after October 1, 2024, but before October 1, 2025, is increased.

·       Arrow Shafts Tax Increase: The tax on arrow shafts is also increased for 2025.

·       Private Foundation Excise Taxes: There are proposals and legislation in 2025 that may affect excise taxes on private foundations, such as increased rates based on asset size. 

This information provides an overview of federal excise taxes in the US for 2025. It's important to consult official IRS resources and potentially seek professional advice for specific tax situations. 

US federal excise taxes by types 2025

In the United States, federal excise taxes for 2025 are imposed on a variety of goods, services, and activities

. The IRS categorizes these into several broad types: 

1. Environmental Taxes: 

·       Petroleum Taxes: Includes taxes on domestic and imported petroleum products used to fund superfund and oil spill liability.

·       Ozone-Depleting Chemicals (ODCs): Taxes on ODCs and imported products containing them.

·       Coal Tax: Tax on the sale or use of coal, with specific rates for underground and surface mined coal.

·       Other Environmental Taxes: Can include taxes on certain chemicals. 

2. Communications and Air Transportation Taxes: 

·       Air Transportation Taxes:

·       Transportation of persons by air: Includes a 7.5% percentage tax on the price of the ticket, plus a domestic segment tax of $5.20 per passenger per segment. International flights beginning or ending in the U.S. are subject to a $22.90 tax per person.

·       Use of International Air Travel Facilities: A lower rate of $11.40 applies to domestic segments beginning or ending in Alaska or Hawaii, but only for departures.

·       Transportation of Property by Air: A 6.25% tax is charged on domestic air cargo.

·       Communications Taxes: Local telephone and teletypewriter exchange services. 

3. Fuel Taxes: 

·       Gasoline, including aviation gasoline and gasoline blendstocks: Subject to excise tax.

·       Diesel Fuel, including dyed diesel fuel: Subject to excise tax.

·       Kerosene, including dyed kerosene and kerosene used in aviation: Subject to excise tax.

·       Other Fuels: Including alternative fuels.

·       Compressed Natural Gas (CNG): Subject to excise tax.

·       Fuels used in commercial transportation on inland waterways: Subject to excise tax.

·       Liquids used in a fractional ownership program aircraft as fuel: Subject to tax. 

4. Retail Taxes: 

·       Truck, Trailer, and Semitrailer Chassis and Bodies, and Tractor: Tax on the first retail sale. 

5. Ship Passenger Tax: 

·       Transportation by Water: Tax imposed on certain passenger transport by ship. 

6. Foreign Insurance Tax: 

·       Policies Issued By Foreign Insurers: Tax imposed on certain insurance policies from foreign providers. 

7. Manufacturers Taxes: 

·       Coal: Tax on the production of coal.

·       Tires: Taxes on various types of taxable tires.

·       Gas Guzzler Tax: Tax on certain vehicles with low fuel mileage.

·       Vaccines: Tax imposed on the sale of certain vaccines. 

8. Other Excise Taxes: 

·       Sport Fishing Equipment: Taxes on items like fishing rods, reels, and tackle boxes.

·       Bows, Quivers, Broadheads, and Points: Taxes on these archery-related items.

·       Indoor Tanning Services: Subject to a 10% excise tax.

·       Inland Waterways Fuel Use Tax: Tax on fuel used in commercial transportation on inland waterways.

·       Patient-Centered Outcomes Research (PCOR) Fee: A fee related to healthcare plans.

·       Repurchase of Corporate Stock: A 1% excise tax on certain stock buybacks.

·       Wagering Taxes: Includes taxes on accepting wagers and for being in the business of accepting wagers. 

Important Notes:

·       Form 720: Businesses that provide goods or services subject to these taxes must generally report them on Form 720, Quarterly Federal Excise Tax Return.

·       Inflation Adjustments: Some excise tax rates, particularly those related to air transportation, are subject to annual inflation adjustments.

·       Trust Funds: Many excise taxes are deposited into specific trust funds, such as the Highway Trust Fund and Airport and Airway Trust Fund, to finance related infrastructure projects.

·       Consult IRS Publications: For detailed and up-to-date information on excise taxes, including rates and filing requirements, consult IRS Publication 510, Excise Taxes, and the instructions for Form 720. 

https://www.google.com/search?q=us+federal+excise+taxes+by+types+2025

In 2025, the US federal government is projected to collect $96 billion in excise taxes, according to Statista. This is a portion of the total federal revenue, which is estimated to be $5.49 trillion. 

Breakdown of Federal Revenue Sources:

Individual Income Taxes: The largest source of federal revenue, accounting for 49% of total revenue.

Payroll Taxes: Used to fund Social Security, Medicare, and federal unemployment insurance, making up 35% of total revenue.

Corporate Income Taxes: Contribute 11% to the total revenue.

Other Taxes:  Including excise taxes, estate taxes, and customs duties, make up the remaining 5%. 

Excise Tax Revenue in Detail:

·       Key excise taxes: Include taxes on motor fuel, airline tickets, tobacco, alcohol, and certain health-related goods and services. 

·       Historical context: In 2022, excise tax revenue totaled nearly $90 billion. 

·       Growth: The $96 billion projected for 2025 indicates a slight increase compared to previous years, according to Statista. 

https://www.google.com/search?q=how+much+revenue+did+the+us+federal+government+collect+from+excise+taxes+2025

The federal excise tax on cigarettes in the U.S. is currently $1.01 per pack. Additionally, states and local jurisdictions also impose their own excise taxes, which vary significantly. For example, as of July 1, 2025, the average state cigarette tax is $2.01 per pack, according to the Campaign for Tobacco-Free Kids. Local taxes can further increase the total tax burden on cigarettes. 

https://www.google.com/search?q=what+is+the+current+exise+tax+on+cigirettes+in+the+us+2025

There is currently no federal excise tax on vaping products in the U.S. However, many states and some localities have implemented their own excise taxes on vaping products. These taxes vary significantly by location, with some states imposing taxes based on the wholesale or retail price of the product, while others use a volume-based tax (e.g., per milliliter of e-liquid). 

State-level taxes on vaping products:

·       Taxation Methods: States employ various methods for taxing vaping products, including:

o   Ad Valorem Taxes: These taxes are based on the price of the product, either wholesale or retail. 

o   Specific Taxes: These taxes are a fixed amount per unit, such as per milliliter of e-liquid or per cartridge. 

o   Combined Taxes: Some states use a combination of ad valorem and specific taxes. 

·       Examples:

o   California: Taxes vaping products at 56.32% of the wholesale price and 12.5% of the retail price. 

o   Colorado: Taxes vaping products at 50% of the manufacturing price. 

o   Connecticut: Taxes open systems at 10% of wholesale and closed systems at $0.40 per mL. 

o   Delaware: Taxes at $0.05 per mL. 

o   Minnesota: Taxes at 95% of the wholesale price. 

o   Rhode Island: Taxes at $0.50 per mL. 

o   Delaware, Kansas, Louisiana, North Carolina, and Wisconsin: All have a low per milliliter rate of $0.05. 

·       No Federal Tax: As of now, there is no federal excise tax on vaping products in the U.S. 

Important Considerations:

·       Lack of Consistency:

The lack of uniformity in taxation methods across states contributes to a complex and potentially confusing system.

·       Illicit Market:

The varying tax rates and complex regulations can contribute to a thriving illicit market for vaping products, making it difficult to track and collect taxes on all products sold. 

https://www.google.com/search?q=what+is+the+current+average+excise+tax+on+vaping+products+in+the+us+2025

AI Overview

Vaping, even in 2025, carries significant health risks, including addiction, lung damage, and cardiovascular problems. E-cigarettes contain nicotine, which is highly addictive and can harm adolescent brain development, which continues into a person's mid-20s. Beyond nicotine, vaping exposes users to various harmful chemicals, some of which are known carcinogens. The long-term effects of vaping are still being studied, but research suggests it can lead to chronic lung diseases, heart problems, and even increase the risk of cancer. 

https://www.google.com/search?q=what+are+the+health+risks+associated+with+vaping+2025

AI Overview

As of 2025, recreational marijuana use is legal in 24 states and Washington, D.C.

The states that have legalized recreational marijuana as of 025 include: 

·       Alaska

·       Arizona

·       California

·       Colorado

·       Connecticut

·       Delaware

·       Illinois

·       Maine

·       Maryland

·       Massachusetts

·       Michigan

·       Minnesota

·       Missouri

·       Montana

·       Nevada

·       New Jersey

·       New Mexico

·       New York

·       Ohio

·       Oregon

·       Rhode Island

·       Vermont

·       Virginia

·       Washington 

Washington, D.C. also permits recreational marijuana use. 

Even in states where recreational marijuana is legal, there are regulations regarding possession limits, public consumption, and home cultivation. Marijuana remains illegal at the federal level as a Schedule I drug under the Controlled Substances Act of 1970, despite recreational use being legal in these states. Some states not listed above have legalized medical marijuana. 

Marijuana use is associated with several health risks, including increased risks of heart attack, stroke, and cardiovascular disease, as well as potential mental health issues like psychosis and schizophrenia, and possible links to testicular cancer and respiratory problems. Additionally, marijuana use can impair cognitive function, memory, and reaction time, and may lead to addiction and other substance use disorders. 

https://www.google.com/search?q=what+are+the+health+risks+associated+with+marijuana+use+2025

Drug testing is still used by U.S. employers in 2025, although its application is evolving. 

Here's a breakdown:

·       Federal Requirements: Employers in certain industries, like transportation (regulated by the Department of Transportation - DOT), are required to conduct drug tests for safety-sensitive positions. For instance, the Pipeline and Hazardous Materials Safety Administration (PHMSA) increased its random drug testing rate to 50% for 2025 due to concerns about positive test thresholds.

·       Private-sector employers: While not generally mandated by federal law, private-sector employers can still choose to implement drug testing programs. Many companies utilize pre-employment drug tests as a condition of employment.

·       Reasons for testing: Employers use drug testing to maintain workplace safety, boost productivity, reduce accidents, and comply with legal requirements.

·       Types of tests: Common methods include urine, saliva, hair, and blood tests, with urine tests being the most prevalent.

·       Evolving landscape:

·       Marijuana legalization: While many states have legalized marijuana for medical or recreational use, employers can still test for it and take adverse employment actions based on positive results, as federal law still classifies marijuana as a controlled substance. However, some states offer protections to employees who use medical marijuana.

·       New testing methods: Oral fluid testing has gained approval as an alternative to urine testing, offering greater flexibility and difficulty for tampering.

·       Focus on employee wellness: Some employers are shifting towards a more supportive approach to substance abuse, incorporating rehabilitation and mental health support alongside drug testing programs.

·       Remote work: Drug testing policies are being adapted to accommodate remote workers, with companies using remote testing solutions to ensure a drug-free environment regardless of location. 

In summary, while the landscape of drug testing in the workplace is evolving, it remains a relevant practice for U.S. employers in 2025, especially in safety-sensitive industries. 

https://www.google.com/search?q=is+drug+testing+still+used+by+us+employers+2025

Comments

US Excise Taxes are not a popular topic covered in the media or in the “education curriculum”. It should be covered in “Civics” class. Consumers know they exist, because they appear on our bills and receipts. The fact that half of the States in the US allow recreational marijuana use explains a lot.

Norb Leahy, Dunwoody GA Tea Party Leader