We compare the outcomes of homogeneous and differentiated taxation on imperfectly competitive differentiated products markets. We focus on ad valorem tax applied to product quality and study the effects on prices and welfare. After a symmetric tax rate rise, net prices diverge if the tax is sufficiently differentiated on product quality; they converge if the tax is homogeneous between product qualities. Competition lessens such divergence and boosts such convergence. Under a differentiated taxation regime, tax revenues are higher, as are producer rents, but at the cost of a lower consumer surplus.