Legal Definitions - luxury tax

A luxury tax is a type of tax imposed by the government on luxury goods or services. It is an additional tax on top of the regular taxes that people pay. The purpose of a luxury tax is to generate revenue for the government and to discourage people from buying expensive items.

• A tax on yachts or private jets
• A tax on high-end jewelry or watches
• A tax on luxury cars or sports cars

These examples illustrate how a luxury tax targets expensive items that are not necessary for everyday life. By imposing a luxury tax, the government can generate revenue from those who can afford to pay more for luxury items.