The Internal Revenue Service collects taxes every quarter for selling of specific commodities such as gasoline. Besides, there being excise taxes individuals in the U.S have to file city taxes to report their income or property. Although, most individuals and businesses would be aware of the differences between the two tax returns but, those filing either of the taxes for the first need to have a clear understanding of both the taxes to make the filing process smooth. Additionally, e filing is better than paper filing, as this saves time also adding ease. Read below to learn how both the taxes are different.

• ·         Excise Taxes are included in the price of the product and for funding

Going back to the history of Federal excise tax, these were levied on purchase of certain to meet the expenses during the American Revolutionary War and Civil War. However, over the years there were modifications to the excise taxes levied by the government. Today, excise taxes are filed by individuals and businesses or purchase of specific products like gasoline but, not listed as a separate expense on the payment receipt. As discussed, originally excise taxes were used for funding the war expenses but, now most of the excise taxes are levied to support specific funds such as Highway Trust Fund.

• ·         Excise Tax is levied by the Federal, State, or Local Government

A well known fact, excise taxes are levied by either of the government bodies i.e, Federal, State, or Local on goods and services. Say for example, there are cities where the DMV (Department of Motor Vehicles) imposes excise tax on registering a new vehicle. Additionally, there are car dealers levy excise taxes when an individual invests in a new vehicle in the same state. Besides, there are federal excise taxes imposed on gasoline, telephone services, and salons offering tanning services.

• ·         City Tax is Imposed on Individuals Income and Personal Property:

There are few city governments in the U.S that impose taxes on individual’s income and property unlike excise taxes that are imposed on goods and services. There are few cities that levy tax on individuals residing within the city and travelling within the boundaries of the city for work. According to Tax Foundation, City Tax is the source of alternate revenue for commodities.

• ·         City Tax Imposed on Certain Goods and Services

There are city taxes levied on certain goods and services purchased with the boundaries of the city. In most cases, these taxes are determined by local assemblies and agencies. However, City taxes levied on goods and services can be referred as excise taxes too and can be used interchangeably in such cases.

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