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What is consumption tax?

Consumption tax is a tax on goods or services – what you spend, rather than what you earn. In the U.S., consumption tax comes in the form of retail sales tax and excise tax (tax imposed on certain goods or activities, like alcohol or fuel).

What is an example of a consumption tax?

Retail sales tax and value-added tax are examples of a consumption tax. A consumption tax is charged when consumers spend money, while an income tax is assessed on earned money. Examples of consumption taxes include retail sales taxes, excise taxes, value-added taxes, use taxes, taxes on gross business receipts, and import duties.

Are consumption taxes tax deductible?

Consumption taxes can take several forms, including sales tax, value-added tax, excise tax, and import taxes and tariffs. You can deduct either your state and local income taxes or your state and local sales taxes, whichever results in a bigger tax benefit, as an itemized deduction on your federal income tax return.

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Risk warning: Digital asset trading is an emerging industry with bright prospects, but it also comes with huge risks as it is a new market. The risk is especially high in leveraged trading since leverage magnifies profits and amplifies risks at the same time. Please make sure you have a thorough understanding of the industry, the leveraged trading models, and the rules of trading before opening a position. Additionally, we strongly recommend that you identify your risk tolerance and only accept the risks you are willing to take. All trading involves risks, so you must be cautious when entering the market.

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