--- title: "Excise Tax: What Is It and When Do You Have to Pay It?" description: An excise tax is a legislated tax imposed on some goods, services, and activities. Here's how you know whether or not you need to file excise taxes. image: https://blog.chaliffcpa.com/hubfs/Excice%20Tax%20Chaliff%20+%20Associates%20Blog%20Photos.png --- ###### ![phone](https://blog.chaliffcpa.com/hubfs/phone.svg)  901.753.4000 ![email](https://blog.chaliffcpa.com/hubfs/email.svg)   [Email Us](https://chaliffcpa.com/#homeRequestAConsultation) [Client Portal](https://chaliffcpa.cchifirm.us/clientportal/) [Request Consultation](https://chaliffcpa.com/#homeRequestAConsultation) [![chaliff logo](https://blog.chaliffcpa.com/hubfs/chaliff-logo.png)](https://chaliffcpa.com/) ![menu-chaliff](https://blog.chaliffcpa.com/hubfs/Website%20Assets/menu-chaliff.png) ![close_chaliff](https://blog.chaliffcpa.com/hs-fs/hubfs/close_chaliff.png?width=72&height=48&name=close_chaliff.png) - [Services](https://chaliffcpa.com/#homeServices) - [Testimonials](https://chaliffcpa.com/#homeTestimonials) - [About](https://chaliffcpa.com/#homeAbout) - [Blog](https://blog.chaliffcpa.com) - [Services](https://chaliffcpa.com/#homeServices) - [Testimonials](https://chaliffcpa.com/#homeTestimonials) - [About](https://chaliffcpa.com/#homeAbout) - [Blog](https://blog.chaliffcpa.com) [Accounting](https://blog.chaliffcpa.com/tag/accounting) [Small Business](https://blog.chaliffcpa.com/tag/small-business) [Taxes](https://blog.chaliffcpa.com/tag/taxes) [Tax Advisor](https://blog.chaliffcpa.com/tag/tax-advisor) # Excise Tax: What Is It and When Do You Have to Pay It? [Gregory Chaliff](https://blog.chaliffcpa.com/author/gregory-chaliff) ![](https://blog.chaliffcpa.com/hubfs/Excice%20Tax%20Chaliff%20+%20Associates%20Blog%20Photos.png) What is excise tax? An excise tax is a legislated tax imposed on some goods, services, and activities. In order to be compliant with IRS requirements, small businesses need to know whether or not they need to pay and file excise taxes. ## ![yellow-rectangle-vertical](https://blog.chaliffcpa.com/hubfs/yellow-rectangle-vertical.svg) Goods, Services, and Activities That Are Subject to Excise Tax [Excise taxes](https://www.nerdwallet.com/article/small-business/excise-tax-guide) are usually paid by businesses. Businesses pay an excise tax when an item or activity is considered either a luxury or socially harmful. ###### These include items like: - Luxury vehicles - Alcohol - Tobacco, vaping, and e-cigarettes - Gas and fuel - Plane tickets - Indoor tanning beds - Medical and recreational marijuana - Firearms and ammunition - Gambling and sports betting Certain excise taxes are called “sin taxes” if the item is considered to be of high social cost– usually related to tobacco and alcohol products. But not all excise tax is “sin tax.” Simply put, a good or service that is considered unhealthy or luxurious by lawmakers will incur excise tax. ###### Excise tax is determined by three factors: 1. The tax base (qualifications of the taxed item) 2. The rate 3. Specific measures, such as price or rate ## ![yellow-rectangle-vertical](https://blog.chaliffcpa.com/hubfs/yellow-rectangle-vertical.svg) Who Pays Excise Tax? Businesses that sell these excise-taxed items must pay the corresponding tax.  Sometimes, these taxes are state-based, and other times they are federal. The amount owed is dependent on local, state, and federal tax requirements.  In Tennessee, the [Department of Revenue](https://www.tn.gov/revenue/taxes/franchise---excise-tax.html#:~:text=If%20you%20are%20a%20corporation,pay%20franchise%20and%20excise%20taxes.) states, #### “If you are a corporation, limited partnership, limited liability company, or business trust chartered, qualified, or registered in Tennessee or doing business in this state, then you must register for and pay franchise and excise taxes\[....\]" The excise tax is based on net earnings or income for the tax year." [Related: 10 Everyday Business Purchases That Are Tax-Deductible](https://blog.chaliffcpa.com/10-everyday-business-purchases-that-are-tax-deductible) ## ![yellow-rectangle-vertical](https://blog.chaliffcpa.com/hubfs/yellow-rectangle-vertical.svg) How to File Federal Excise Taxes Federal excise taxes should be paid quarterly.  Businesses can file by mail or use the IRS Electronic Funds Tax Payment System (EFTPS). IRS [Form 720](https://www.irs.gov/forms-pubs/about-form-720) will provide you with the instructions you need to file federal excise taxes.  ### What About Excise Taxes in Tennessee? Excise taxes in Tennessee must be filed electronically.  The best way to do this is through the Tennessee Taxpayer Access Point (TNTAP). Businesses will need to have a TNTAP account to fulfill this requirement. ### Getting Help for Excise Taxes in Tennessee If your small business wants to ensure total compliance with federal and state requirements, a great strategy is to use a small business CPA. #### Hiring a CPA for your small businesses means you don’t have to stress about making accounting and tax filing mistakes. These kinds of mistakes, after all, can be expensive and time-consuming.   Instead of worrying about doing it all yourself, choose a qualified and experienced CPA to help. Your CPA can handle the details about what is an excise tax and other areas of your business. [Related: How Can A CPA Help Your Small Business?](https://blog.chaliffcpa.com/how-can-a-cpa-help-your-small-business) ## CHALIFF + ASSOCIATES: EXCISE TAX EXPERTS Small businesses in Tennessee have someone on their side: Chaliff + Associates.  We pride ourselves on delivering superior accounting services to the Mid-South along with an exceptional customer experience! [Schedule a free consultation](https://chaliffcpa.com/#homeRequestAConsultation) with a member of our Chaliff + Associates team today to learn more about accounting best practices and how we can alleviate stress and give you more time to focus on growing your business.  ###### WE CRUNCH THE NUMBERS SO YOU CAN FOCUS ON BUSINESS GROWTH [Schedule a call today to learn how we can help your business grow.](https://chaliffcpa.com/#homeRequestAConsultation)   [![Schedule A Call](https://no-cache.hubspot.com/cta/default/19646192/35fe8ca4-a0dd-47e9-83a3-e50585ef8c20.png)](https://cta-redirect.hubspot.com/cta/redirect/19646192/35fe8ca4-a0dd-47e9-83a3-e50585ef8c20) Previous Post ###### [How Does Sales Tax Work In The United States?](https://blog.chaliffcpa.com/how-does-sales-tax-work-in-the-united-states) Next Post ###### [Understanding Business Property Taxes: Is There Tax Relief?](https://blog.chaliffcpa.com/understanding-business-property-taxes-is-there-tax-relief) ### Similar Blog Posts [![Business-man-on-the-phone-in-office](https://blog.chaliffcpa.com/hs-fs/hubfs/Blog%20Post%2024.png?width=352&name=Blog%20Post%2024.png)](https://blog.chaliffcpa.com/what-does-a-tax-accountant-do-for-small-businesses) #### [What Does a Tax Accountant Do for Small Businesses?](https://blog.chaliffcpa.com/what-does-a-tax-accountant-do-for-small-businesses) [![Man-And-Woman-Talking-Together-At-Computer](https://blog.chaliffcpa.com/hs-fs/hubfs/Blog%20Post%2019.png?width=352&name=Blog%20Post%2019.png)](https://blog.chaliffcpa.com/how-to-file-taxes-a-helpful-checklist-for-small-business-owners) #### [How To File Taxes: A Helpful Checklist for Small Business Owners](https://blog.chaliffcpa.com/how-to-file-taxes-a-helpful-checklist-for-small-business-owners) [![Man-sitting-at-computer-thinking](https://blog.chaliffcpa.com/hs-fs/hubfs/Blog%20Post%2018.png?width=352&name=Blog%20Post%2018.png)](https://blog.chaliffcpa.com/what-happens-if-you-file-your-business-taxes-late) #### [What Happens If You File Your Business Taxes Late?](https://blog.chaliffcpa.com/what-happens-if-you-file-your-business-taxes-late) [![chaliff-logo-white](https://blog.chaliffcpa.com/hs-fs/hubfs/chaliff-logo-white.png?width=200&height=61&name=chaliff-logo-white.png "chaliff-logo-white")](https://chaliffcpa.com/) Chaliff & Associates **© **2021 | [Privacy Policy](https://chaliffcpa.com/privacy) | [Accessibility](https://chaliffcpa.com/accessibility) ![1_Badge_Online_large](https://blog.chaliffcpa.com/hs-fs/hubfs/1_Badge_Online_large.png?width=80&height=106&name=1_Badge_Online_large.png "1_Badge_Online_large") [Follow us on Facebook](https://www.facebook.com/chaliffcpa) [Follow us on LinkedIn](https://www.linkedin.com/company/chaliffcpa/)