Tax deductions can help lessen tax burdens for both businesses and individuals. Businesses can often deduct excise taxes that are “ordinary and necessary expenses of carrying on your trade or business.” However, individuals generally cannot deduct excise taxes incurred as a personal expense.
See the IRS or your state and local government websites for specifics.
It depends on the type of excise tax, the taxing jurisdiction, and the filing schedule.
The Washington state business and occupation (B&O) tax, which is reported and paid on the excise tax return or by electronic filing, is reported on a monthly, quarterly, or annual basis. The Washington State Department of Revenue decides how frequently a taxpayer must file excise tax returns.
- Monthly returns are due on the 25th of the following month
- Quarterly returns are due by the end of the month following the close of the quarter
- Annual returns are due on April 15 (formerly January 31)
Excise tax is different from sales tax, though they two tax types are similar.
There are goods and services that are subject to excise tax but not sales tax, sales tax but not excise tax, both sales tax and excise tax, or neither sales tax nor excise tax.
- Both excise tax and sales tax are indirect taxes.
- There are federal excise taxes, but there’s no federal sales tax.
- All 50 states have some type of excise tax, but five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) have no general sales tax. (Alaska allows local sales taxes).
- Excise tax can be either an ad valorem tax or a flat, per-unit tax. Sales tax is always an ad valorem tax; it’s a percentage of the retail sales price.
- Excise tax often isn’t listed on invoices and receipts; sales tax usually is.
- Excise tax targets specific goods or services. Sales tax is broad; it usually applies to most tangible personal property, with some exceptions (e.g., clothing, diapers, food for home consumption); some states also apply sales tax to services.
