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Tax Test Bank | Practice Questions & Answers, Study Guide & Exam Prep PDF 2026

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Prepare effectively for taxation courses and exams with this comprehensive Tax Test Bank featuring practice questions and answers covering core taxation principles, tax classifications, tax systems, income taxation, deductions, tax rates, tax laws, tax administration, tax limitations, and fundamental concepts in individual and business taxation. Designed for accounting, business, economics, and taxation students, this resource provides focused exam-style practice for quizzes, midterms, finals, and course assessments while reinforcing key concepts and improving exam readiness. Current Stuvia and study-resource listings show strong demand for taxation test banks covering federal taxation, individual taxation, business taxation, and chapter-based exam questions.

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Tax Test Bank | Practice Questions & Answers | Exam Prep


ion as distinguished from police power and power of D
eminent domain.

A. Property is taken to promote the general welfare.
B. Maybe exercised only by the government.
C. Operates upon the whole citizenry.
D. There is generally no limit as to the amount that may be
imposed


The following are constitutional limitations, except D

A. No imprisonment for non-payment of poll tax.
B. Non-impairment of the obligation of contracts.
C. Rule of uniformity and equity in taxation.
D. Exemption from income tax of charitable institutions,
cemeteries, churches,
personage or convents appurtenant thereto, as well as all
lands, buildings and
improvements actually, directly and exclusively used for
religious, charitable and
educational purposes.


Which of the following statements is correct? C

A. The President is authorized to increase or decrease
national internal revenue tax rates.
B. One of the nature of taxation is the reciprocal duties of
protection and support between
the state and subjects thereof.
C. Every sovereign government has the inherent power to
tax.
D. Income tax in an indirect tax


A tax must be imposed for public purpose. Which of the D
following is not a public purpose?

A. National defense
B. Public education
C. Improvement of the sugar and coconut industries.
D. Improvement of a subdivision road


Which is not an essential characteristic of a tax? A

A. It is unlimited as to amount.
B. It is payable in money.
C. It is proportionate in character.
D. It is an enforced contribution


Special assessment is an enforced proportional B
contribution from owners of land especially benefited by
public improvement. Which one of the following is not
considered as one of its characteristics?

A. It is levied on land.
B. It is based on the government's need of money to
support its legitimate objectives.
C. It is not a personal liability of the persons assessed.
D. It is based solely on the benefit derived by the owners
of the land.


It is the privilege of not being imposed a financial B
obligation to which others are subject.

A. Tax incentive
B. Tax exemption
C. Tax amnesty
D. Tax credit




Stuvia 2026-2027

, Tax Test Bank | Practice Questions & Answers | Exam Prep


As to scope of the legislative power to tax, which is not D
correct?

A. Where there are no constitutional restrictions, and
provided the subjects are within the territorial jurisdiction of
the state, Congress has unlimited discretion as to the
persons, property or occupations to be taxed.
B. In the absence of any constitutional prohibition,
Congress has the right to levy a tax of any amount it sees
fit.
C. The discretion of Congress in imposing taxes extends to
the mode, method or kind of tax, unless restricted by the
constitution.
D. The sole arbiter of the purpose or which taxes shall be
levied is Congress, provided
the purpose is public and the courts may not review the
levy of the tax to determine
whether or not the purpose is public


Which of the following is a nature of taxation? A
A. The power is granted by legislative action.
B. It is essentially an administrative function.
C. It is generally payable in money.
D. Without it the state can continue to exist.


Which of the following is not a determinant of the place of D
taxation?

A. Source of the income
B. Citizenship of the taxpayer
C. Residence of the taxpayer
D. Amount of tax to be imposed


Which of the following statements is not correct? C

A. An inherent limitation of taxation may be disregarded by
the application of a
constitutional limitation.
B. The property of an educational institution operated by a
religious order is exempt from
property tax, but its income is subject to income tax.
C. The prohibition of delegation by the state of the power
of taxation will still allow the
BIR to modify the rules in time for filing of returns and
payment of taxes.
D. The power of taxation is shared by the legislative and
executive departments of the
government


Statement 1 - The point on which tax is originally imposed C
is impact of taxation.
Statement 2 - Eminent domain is inferior to non-
impairment clause of the constitution.
Statement 3 - As a rule, taxes are subject to set-off or
compensation.
Statement 4 - As a rule, provisions on the validity of tax
exemptions are resolved liberally in favor of the taxpayer.

Statement 1Statement 2Statement 3Statement 4
A. True False False True
B. False True True False
C. True True False False
D. False False True True


A tax system where the revenues are supplied mostly by D
indirect taxes.

A. Schedular C. Progressive
B. Proportional D. Regressive




Stuvia 2026-2027

, Tax Test Bank | Practice Questions & Answers | Exam Prep


A tax system where the greater bulk of the tax revenues is C
derived by direct taxes.

A. Schedular C. Progressive
B. Proportional D. Regressive


This is an inherent limitation on the power of taxation. D

A. Rule on uniformity and equity in taxation.
B. Due process of law and equal protection of the laws.
C. Non-impairment of the jurisdiction of the Supreme Court
in tax cases.
D. Tax must be for the public purpose


This is a constitutional limitation on the power of taxation. C

A. Tax laws must be applied within the territorial jurisdiction
of the state.
B. Exemption of government agencies and
instrumentalities from taxation.
C. No appropriation of public money for religious purposes.
D. Power to tax cannot be delegated to private persons or
entities.


They exist independent of the constitution being D
fundamental powers of the state, except

A. Power of taxation
B. Power of imminent domain
C. Police power
D. Power of recall


he power to acquire private property upon payment of just B
compensation for public purpose

A. Power of taxation
B. Power of imminent domain
C. Police power
D. Power of recall


The power to regulate liberty and property to promote the C
general welfare.

A. Power of taxation
B. Power of imminent domain
C. Police power
D. Power of recall


The power to demand proportionate contributions from A
persons and property to defray the expenses of the
government.

A. Power of taxation
B. Power of imminent domain
C. Police power
D. Power of recall


Basic Principles of a sound tax system, except D

A. Fiscal adequacy
B. Administrative feasibility
C. Equality or theoretical justice
D. Intellectual sensitivity




Stuvia 2026-2027

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