Sales tax and excise tax are classified as what type of tax?

Sales tax and excise tax are classified as internal taxes because they are levied directly on the consumption of goods and services within a jurisdiction. Internal taxes are generally applied to specific transactions or activities, such as the sale of products or the use of certain goods, which is precisely what sales and excise taxes do. These taxes are collected by the seller at the point of sale, thereby becoming part of the transaction process.

In contrast, direct taxes are typically assessed on the income or wealth of individuals and corporations, which is different from the transactional nature of sales and excise taxes. Property tax is specifically related to real estate and is levied based on the value of property owned, and real estate tax pertains only to land and any structures on it, which does not encompass the broader scope of sales or excise taxes. Thus, internal tax is the appropriate classification for sales tax and excise tax.