---
title: Excise Tax
description: Excise tax is an indirect tax charged to a producer of a good such as oil or tobacco that is ultimately passed onto a consumer via a higher price.
---

[Realized 1031 Glossary of Terms ](https://www.realized1031.com/glossary)

# [Excise Tax](https://www.realized1031.com/glossary/excise-tax)

 Written by [The Realized Team](https://www.realized1031.com/glossary/author/the-realized-team) | Jun 27, 2022 12:00:00 PM

Excise tax is an indirect tax charged to a producer of a good such as oil or tobacco that is ultimately passed onto a consumer via a higher price. There are two types of excise taxes: ad valorem and specific excise tax.

Ad valorem means “according to value” in Latin. An ad valorem excise tax is levied on a product or service based on its value. Tax regulators impose ad valorem excise taxes on products and services via a fixed percentage of the price for that good or service.

Specific excise taxes differ from ad valorem taxes in that the price of the tax is a fixed dollar amount on a product instead of a fixed percentage of the cost.

[View full post](https://www.realized1031.com/glossary/excise-tax)

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