User Fee

AAA

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.



RELATED TERMS
  1. Utilization Fee

    An annual fee assessed by a lender against a borrower. The fee ...
  2. Licensing Fee

    1. An amount of money paid by an individual or business to a ...
  3. State Income Tax

    Tax levied on income at the state level. State income taxes have ...
  4. Acquisition Fee

    A fee charged by a lessor to cover the expenses incurred in arranging ...
  5. Gas Guzzler Tax

    An additional tax on the sale of vehicles that have poor fuel ...
  6. Regressive Tax

    A tax that takes a larger percentage from low-income people than ...
Related Articles
  1. Retirement

    Tax Tips For The Individual Investor

  2. Taxes

    The Tax Benefits Of Having A Spouse

  3. Taxes

    Tablets To 1040s: How Taxes Began

  4. Taxes

    7 Year-End Tax Planning Strategies

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center