The consumption tax that is typically already included in the price of items like gasoline, airline tickets, and alcohol is called an excise tax.

Excise Tax Features

• Excise taxes are levied on specific goods and services, particularly ones like gasoline, airline tickets, and alcohol.
• These taxes are often included in the price of the item rather than added separately at checkout.
• They can be per-unit taxes (e.g., per gallon of gasoline, per proof gallon of alcohol) or a percentage of the price (e.g., airline ticket tax).
• Excise taxes are an indirect tax, usually paid by manufacturers or importers but passed on to consumers through higher prices.

Examples

• Gasoline excise tax is a per-gallon tax included in the price at the pump.
• Airline tickets include a federal excise tax added into the ticket price or as part of fees.
• Alcohol has excise taxes based on the type and strength of the beverage and is included in the retail price.

This tax serves to generate revenue and sometimes to discourage consumption of certain goods.