Which of the following goods or services is commonly subject to an excise tax?

• A. Public education tuition
• B. Cigarettes
• C. Residential rent
• D. Basic groceries

Answer: (B)

Verified step by step guidance

1. Understand what an excise tax is: it is a tax imposed on specific goods or services, often those considered harmful or non-essential, such as tobacco, alcohol, or gasoline.
2. Review each option and consider whether it is typically targeted by excise taxes. Public education tuition and residential rent are services not usually taxed this way, and basic groceries are often exempt to avoid burdening essential consumption.
3. Recognize that cigarettes are a classic example of a good subject to excise taxes because governments use these taxes both to raise revenue and to discourage consumption due to health concerns.
4. Conclude that among the options, cigarettes are the good commonly subject to an excise tax.
5. Remember that excise taxes are different from sales taxes or property taxes, as they apply specifically to certain goods or activities.