Tax Category Tax: calculations, VAT, self-employment tips and more

List of Indirect Taxes

Indirect taxes, such as sales tax or value-added tax, can be imposed by the government. Sometimes, these costs can get passed on to consumers when companies raise their prices to compensate for an increased tax burden. Government fees and charges for various permits and licenses are also a form of indirect taxation.


Tariffs are one way that the government raises revenue. A tariff is a fee imposed on imported goods that is not charged to domestic producers of those items. This has the effect of making imported goods cost more than domestic goods to provide an advantage to the country's manufacturing and agricultural producers.

According to Auburn University a tariff can be imposed as an "ad valorem"tax, a fee imposed as a percentage of the items worth or as a specific dollar amount per unit imported. These indirect taxes are a small fraction of the revenues levied by modern countries.


License fees are an indirect tax imposed by most state and municipal governments. States charge fees for marriage and driver's licenses, and hunting and fishing permits. Another example of an indirect tax is parking fees within state parks and recreation areas.

Another indirect tax imposed by the states and local governments is aimed at merchants. Special permits must be purchased by merchants wishing to sell tobacco, beer, and according to the Florida Department of Agriculture and Consumer Services a separate license must by purchased for every brand of brake fluid and antifreeze the merchant sells. These licenses must be renewed yearly. (See reference 3)

Sales Taxes

Sales taxes are perhaps the single largest instance of indirect taxation in America. Each state, county, and municipal government uses sales tax as a revenue source. In states with no state income tax sales taxes make up a large part of state revenues.

Sales taxes are imposed by the various levels of government, and merchants are given the task of collecting them for governments. Extra sales tax is also levied on products such as gasoline, alcohol and tobacco products. This type of tax is often called a "sin tax."

According to the University of Tennessee, the first state to levy a sales tax was Mississippi. Forty-five of the fifty United States now impose sales taxes.