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Classification of Taxes

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Classification of Taxes

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  • December 2012
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CLASSIFICATION OF TAXES

1. As to subject matter or object

a. Personal, poll or capitation – tax of a fixed amount imposed on individuals, whether citizens or not, residing within a specified territory without regard to their property or the occupation in which they may be engaged. Example: community tax b. Property – tax imposed on property, whether real or personal, in proportion either to its value or in accordance with some other reasonable method of apportionment. Example: real estate tax c. Excise – tax imposed upon the performance of an act, the enjoyment of a privilege or the engaging in an occupation. Examples: estate tax, donor’s tax, income tax, value-added tax

2. As to who burns the burden

a. Direct – tax demanded from persons who are intended or bound by law to pay the tax. Examples: community tax, estate tax, donor’s tax, income tax b. Indirect – tax which the taxpayer can shift to another. Example: customs, duties, value-added tax some percentage taxes

3. As to determination of amount
a. Specific – tax imposed based on a physical unit of measurement, as by head or number, weight or length or volume. Examples: tax on distilled spirits, fermented liquors, cigars, wines, fireworks, etc. b. Ad valorem – tax of a fixed proportion of the value of property; needs an independent appraiser to determine its value. Examples: real estate tax, certain customs duties, excises taxes on cigarettes, gasoline and others.

*Excise taxes on certain specific goods imposed under the National Internal Revenue Code are either specific or ad valorem taxes.

4. As to purpose

a. General, fiscal or revenue – tax with no particular purpose or object for which the revenue is raised, but is simply raised for whatever need may arise. Examples: income tax, value-added tax b. Special or regulatory – tax imposed for a special purpose regardless of whether...

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