User Fee

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DEFINITION of 'User Fee'

A sum of money paid by the individual who chooses to access a service or facility. Examples of user fees include highway tolls, parking charges and national park entry fees. With user fees, the individual directly pays for something he wants and receives what he has paid for. In contrast, taxes must be paid by force and do not necessarily go toward a specific service or facility that an individual actually uses or benefits from.

INVESTOPEDIA EXPLAINS 'User Fee'

Because user fees are more palatable than taxes, politicians may sometimes try to disguise taxes as user fees. However, sometimes the line between user fees and taxes is blurred, as in the case of gasoline taxes being used to fund the Interstate Highway System. Government services and facilities that are supported by user fees instead of by taxes more closely resemble private businesses because it is apparent whether a true demand exists for those services and facilities.



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