Page 52 - Calculating Agriculture Cover 20191124 STUDENT - A

4-14 Percentages, Ratios and Relationships CH 4]

Example A: Determine the amount of Excise tax, round to the nearest cent. $5.85
excise tax per pack of cigarettes when purchasing 1 carton of 10 packs per
carton for $100. How much is the excise tax on this shipment?
Tax on items and
Solution: Number of packs per carton x excise tax = total excise tax not sale price.
10 packs/carton x $5.85 per pack = $58.58 excise tax

Example B: Calculate the amount of Excise tax, round to the nearest cent. The excise
tax on beer is $0.5645 for every gallon shipped. The brewer is shipping 8,000
gallons. How much is the excise tax on this shipment?

Solution: Number of gallons x excise tax = total excise tax
8,000 gallons x $0.5645/gallon = $4,516.00

Example C: Calculate the amount of Excise tax, round to the nearest cent. The excise
tax on distilled spirits is $35.22 per gallon. The distiller is shipping 14,000
gallons. How much is the excise tax on this shipment?

Solution: Number of gallons x excise tax = total excise tax
14,000 gallons x $35.22 = $493,080.00

Remember: Excise taxes are added to the price of these items being offered at retail and then
the customer (you) pay sales tax on this retail price. Yes, this is double taxation,
but now you have representation.

Figure 4.1
Excise Tax Stamps for cigarettes, liquor (distilled spirits), and pharmacists.

Tax is paid at production facility before product is loaded on delivery
trucks for distribution and passed onto the customers

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