Final answer:
The purpose of a use tax is to discourage interstate purchases to avoid state sales tax, while an excise tax is levied on specific goods like gasoline, cigarettes, and alcohol, which can be regressive in nature.
Step-by-step explanation:
The purpose of a use tax is to discourage taxpayers from buying goods out of state in order to avoid or minimize the sales tax in their home state. While an excise tax is a tax placed on a specific good, it can serve to discourage consumption or collect revenue on commonly purchased products. However, unlike excise tax, a use tax specifically addresses the gap where sales tax is not collected because an item was purchased from a different state, usually at a lower tax rate or without sales tax entirely.
Some well-known examples of goods subject to excise taxes include gasoline, cigarettes, and alcohol products like beer and liquor. These taxes can be considered regressive because they often represent a larger financial burden relative to income for lower-income individuals compared to those with higher incomes.