cumsock
14:49
Warning
Info
Warning
Info
LSDefine
Simple English definitions for legal terms
privilege tax
Read a random definition: Stepped-up basis
A quick definition of privilege tax:
A privilege tax is a type of tax that the government charges people, businesses, or property to make money for public needs. It can be a charge on things like jobs, activities, or special events. Even though we usually think of taxes as being paid with money, they can also be paid in other ways. For example, if you have to do something extra to follow a law, that can be a type of tax too.
A more thorough explanation:
A privilege tax is a type of tax imposed by the government on individuals, entities, transactions, or property to generate public revenue. It is a monetary charge that can be levied on various things, including privileges, occupations, and enjoyment of the people. The tax can be in the form of duties, imposts, and excises, and it is not necessarily payable in money.
- Accrued tax: This is a tax that has been incurred but not yet paid or payable.
- Accumulated-earnings tax: This is a penalty tax imposed on a corporation that has retained its earnings to avoid income-tax liability arising once the earnings are distributed to shareholders as dividends.
- Admission tax: This is a tax imposed as part of the price of being admitted to a particular event.
These examples illustrate how privilege taxes can be imposed on different things, such as income, property, and events. The accrued tax is a tax that has been incurred but not yet paid, while the accumulated-earnings tax is a penalty tax imposed on corporations that retain their earnings. The admission tax is a tax imposed on individuals attending a particular event. All these taxes are forms of privilege taxes that generate public revenue.