Legal Definitions - surtax exemption

Definition: Surtax exemption refers to an exclusion of an item or an amount from a surtax, which is a tax imposed on top of an existing tax.

For example, if a state imposes a sales tax of 5% on all goods and services, it may also impose a surtax of 2% on luxury items such as jewelry and high-end cars. However, if the state decides to exempt certain luxury items from the surtax, those items would be considered surtax exempt.

Surtax exemption can also refer to an item or an amount that is not subject to a surtax. For instance, if a person's income is below a certain threshold, they may be exempt from paying a surtax on their income tax.

Overall, surtax exemption provides relief to taxpayers who would otherwise have to pay additional taxes on top of their regular taxes.