What are tax stamps?


Quick Answer

Tax stamps are stamps that the government uses to collect fees and taxes. They are small pieces of security papers applied to a product. A tax stamp can also be referred to as a fiscal stamp or a revenue stamp. Revenue stamps appear on certain products, such as cigarettes, documents, playing cards, alcoholic drinks, firearm registrations and hunting licenses.

Continue Reading

Full Answer

Typically, businesses that make products, such as cigarettes, alcoholic drinks and products that the government places a high levy on, purchase the stamps from the government and place them on their products. Tax stamps are not essential, but are necessary for efficient collection of taxes in many countries. A stamp is used to show that a specific sum of money has been paid to the government or government body. The amount is paid by the seller, manufacturer or distributor when purchasing the stamps to put them on the product.

At times, revenue stamps may have a high value because they contain security devices to prevent any form of counterfeiting. A product without a tax stamp may mean that it is counterfeit or that the necessary tax was not paid to the government. Tax stamps are made by a government agency or private companies chosen by the government.

Learn more about Law

Related Questions