Definition of direct tax
: a tax exacted directly from the taxpayer
First Known Use of direct tax
Financial Definition of DIRECT TAX
What It Is
A direct tax is any tax levied on companies or individuals that cannot be transferred to another party. It is the opposite of indirect tax.
How It Works
Direct taxes affect individuals and companies to the amountn of the tax that cannot be eliminated by transferring to another party. Personal, corporate and property taxes are examples of direct taxes.
Why It Matters
Individuals and entities affected by direct taxes should stay informed about how much they should be prepared to pay, and if these changes might affect business decisions.
Legal Definition of direct tax
: a tax imposed on a taxpayer himself or herself or on his or her property — compare excise
Seen and Heard
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