8
lesson pretestMultiple Choice

Pretest

Question 8 • CMS 2026-2027 Economics and Personal Finance CREDIT RECOVERY

How is an excise tax different from a sales tax?

Answer
A
An excise tax applies to specific products.
B
An excise tax is an indirect tax.
C
An excise tax is not deductible.
D
An excise tax applies only to imported goods.

Explanation

An excise tax is charged on particular goods or activities, such as gasoline, tobacco, or alcohol. A sales tax generally applies to a broad range of purchases. Therefore, the distinguishing feature is that an excise tax applies to specific products; it is not limited to imported goods.

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