Excise Taxes

• An excise tax differs from a sales tax in that it is applied not to the sale of all goods but to specific goods. For example, the United States has heavy excise taxes on gasoline and cigarettes -- the latter being an example of a so-called "sin" tax. Generally, these taxes are not levied on the consumer but on the seller of the goods.
  
  

Tax Credit

• In some cases, a government will provide a retailer or a producer of a particular good to which an excise tax is applied a tax credit. This credit will usually be provided when the company performs a particular action. For example, gas companies are provided with a tax credit to mix in ethanol. This credit can be applied directly to the companies' tax burden.
  
  

Payment

• If the government issuing the tax credits agrees to pay them, then it is legally obligated to pay them to anyone who meets the stated qualification to receive them. If a company does not meet the qualifications, then the government obviously is not required to pay them. In all cases, the government will make clear in advance exactly how a company can earn excise tax credits.
  
  

Considerations

• If a company receives excise tax credits and does not use them -- say, because the amount of credits it received exceeds its total tax burden -- then one of two things will happen. In some cases, the credits will be nullified, as if they never existed. However, some governments will allow the credits to roll over, meaning that they can be used for a subsequent year when the company has more excise taxes to pay.