what is luxury tax

Best answer


A luxury tax is asales or transfer tax imposed only on specific goods. The products taxed are considered non-essential or are affordable only to the wealthiest consumers. The mansion tax and sin taxes both fall into the category of luxury taxes.

People also ask


  • What is the luxury car tax?

  • Adjustments, credits and refunds. See also: Luxury car tax rate and thresholds. Definitions – Luxury car tax. Luxury car tax (LCT) is a tax on cars with a GST-inclusive value above the LCT threshold. You must pay LCT when you sell or import a luxury car. Last modified: 27 May 2016QC 22094.

  • Why are luxury taxes bad for the economy?

  • When charged on essential goods, like food and medicine, they are seen as disproportionately burdensome to lower-income consumers, who are forced to pay a higher percentage of their income in sales taxes. A luxury tax is a sales or transfer tax imposed only on specific goods.

  • Is the luxury tax an indirect tax?

  • The luxury tax is an indirect tax in that the tax increases the price of the good or service, a price inflationary burden which is only incurred by the end consumer who purchases or uses the product.

  • What is a luxury tax Quizlet?

  • Key Takeaways 1 A luxury tax is a sales or transfer tax imposed only on specific goods. 2 The products taxed are considered non-essential or are affordable only to the wealthiest consumers. 3 The mansion tax and sin taxes both fall into the category of luxury taxes.

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