CPA Study questions with complete
solutions graded A+
What is a seller in Texas able accept in lieu of tax from a retailer located outside Texas who purchases
taxable items for resale in the United States or Mexico in a transaction that is a sale for resale, as defined
in subsection (b) of this section. - correct answer ✔✔resale certificate
The resale certificate must show: (5) - correct answer ✔✔-The name, signature and address of the
purchaser
-The date of the sale, the state in which the purchaser intends to resell the item
-The sales tax permit number, or the registration number assigned to the purchaser by the state in which
the purchaser is authorized to do business, or a statement that the purchaser is not required to be
permitted in the state in which the purchaser is authorized to do business.
-A description of the taxable items generally sold, leased, or rented by the purchaser in the regular
course of business and a description of the taxable items to be purchased tax free by use of the
certificate.
-The name and address of the seller.
Regarding a resale certificate, What does residents of Mexico (Mexican retailers) show on the resale
certificate? Mexican retailers who purchase taxable items for resale must show their: (3) - correct answer
✔✔-Federal Taxpayers Registry (RFC) identification number for Mexico on the resale certificate and give
a copy of their Mexican Registration Form to the Texas seller.
-An invoice describing the taxable item purchased and showing the exact street address or office address
from which the taxable item will be resold must be attached to the resale certificate.
-The resale certificate must also state the type business engaged in by the purchaser and the type items
sold in the regular course of business.
,(True or False) A resale certificate may be accepted from the out-of-state retailer even if the Texas
retailer ships or delivers the taxable item directly to a recipient located inside Texas - correct answer
✔✔True
Foreign purchasers, other than purchasers from Mexico, who are not engaged in business in Texas and
do not hold a Texas sales and use tax permit, may issue a properly completed _______ __________, as
described in paragraph (2) of this subsection, in lieu of paying tax on the purchase of taxable items for
sale in the normal course of business when the items are delivered or shipped to a location outside of
Texas but within the United States or Mexico. - correct answer ✔✔resale certificate
A seller is engaged in business in this state if the seller: - correct answer ✔✔promotes a flea market, arts
and crafts show, trade day, festival, or other event in this state that involves sales of taxable items.
A small, stand-alone area or structure that:
(A) is used solely to display merchandise or to submit orders for taxable items from a data entry device,
or both;
(B) is located entirely within a location that is a place of business of another seller, such as a department
store or shopping mall; and
(C) at which taxable items are not available for immediate delivery to a purchaser. - correct answer
✔✔Kiosk
Every retailer, wholesaler, distributor, manufacturer, marketplace provider, or any other person who sells,
leases, rents, or transfers ownership of tangible personal property or performs taxable services for
consideration is known as a... - correct answer ✔✔seller
A seller is further defined as a promoter of a flea market, trade day, or other event that involves the sales
of taxable items is a seller responsible for the collection and remittance of the sales tax that dealers,
salespersons, or individuals collect at such events, unless what? - correct answer ✔✔Unless those
persons hold active sales and use tax permits that the comptroller has issued.
Are sellers, also described as promoters of flea markets, trade day, or other event that involves the sales
of taxable items responsible for the collection and remittance of the sales tax that dealers, salespersons,
or individuals collect at such events? - correct answer ✔✔Yes
,Tangible personal property and taxable services. Except as otherwise provided in Tax Code, Chapter 151,
the sale or use of a taxable item in electronic form instead of on physical media does not alter the item's
tax status. - correct answer ✔✔Taxable item
What kind of property is described as can be seen, weighed, measured, felt, or touched or that is
perceptible to the senses in any other manner, including a computer program as defined in §3.308 of this
title (relating to Computers--Hardware, Computer Programs, Services, and Sales) and a telephone
prepaid calling card, as defined in §3.344 of this title. - correct answer ✔✔Tangible Personal Property
(TPP)
Are computer programs and telephone prepaid calling cards considered Tangible Personal Property
(TPP)? - correct answer ✔✔Yes
Computer programs - Rule 3.308
Telephone prepaid calling cards - Rule 3.344
Sales and use tax due is the debt of whom? - correct answer ✔✔The purchaser
The sales and use tax due is a debt of the purchaser to the seller until... - correct answer ✔✔collected
Unpaid sales or use tax is recoverable by the seller in the same manner as the original sales price of the
taxable item itself, if unpaid, would be recoverable. The comptroller may proceed against either the
seller or purchaser, or against both, until all applicable tax, penalty, and interest due has been... - correct
answer ✔✔paid
]Sales and use tax returns must be filed on forms that the _________ ______________. The fact that a
person does not receive or obtain the correct forms from the comptroller does not relieve a person of
the responsibility to file a sales and use tax return and to remit the required sales and use tax. - correct
answer ✔✔comptroller prescribes
Quarterly filers. Permit holders who have less than ________ in state sales and use tax per quarter to
report may file sales and use tax returns quarterly. The quarterly reporting periods end on March 31,
June 30, September 30, and December 31. - correct answer ✔✔$1,500
, Yearly filers. Permit holders who have less than ________ in state sales and use tax to report during a
calendar year may file yearly sales and use tax returns upon authorization from the comptroller. - correct
answer ✔✔$1,000
Monthly filers. Permit holders who have _________ or more in state sales and use tax per quarter to
report must file monthly sales and use tax returns except for permit holders who prepay the sales and
use tax as provided in subsection (h) of this section. - correct answer ✔✔$1,500
Content of an exemption certificate. An exemption certificate must show: (5) - correct answer ✔✔-The
name and address of the purchaser
-A description of the item to be purchased
-The reason the purchase is exempt from tax
-The signature of the purchaser and the date
-The name and address of the seller
What is the Resale Certificate form number? - correct answer ✔✔Form 01-339
Which certificate should a business obtain for items that your business plans on reselling. You can obtain
your inventory in bulk from a supplier and not pay sales tax. The sales tax is obtained when you sale that
item to a buyer. Anybody in Texas, other states, and Mexico can use this as long as they're registered in
their state/country. - correct answer ✔✔Resale Certificate (Form 01-339)
What is the Exemption Certificate form number? - correct answer ✔✔Form 01-339
Organizations that want to use this have to be qualified. If they are approved, then they can use this to
purchase items and avoid paying sales tax. - correct answer ✔✔Exemption Certificate
solutions graded A+
What is a seller in Texas able accept in lieu of tax from a retailer located outside Texas who purchases
taxable items for resale in the United States or Mexico in a transaction that is a sale for resale, as defined
in subsection (b) of this section. - correct answer ✔✔resale certificate
The resale certificate must show: (5) - correct answer ✔✔-The name, signature and address of the
purchaser
-The date of the sale, the state in which the purchaser intends to resell the item
-The sales tax permit number, or the registration number assigned to the purchaser by the state in which
the purchaser is authorized to do business, or a statement that the purchaser is not required to be
permitted in the state in which the purchaser is authorized to do business.
-A description of the taxable items generally sold, leased, or rented by the purchaser in the regular
course of business and a description of the taxable items to be purchased tax free by use of the
certificate.
-The name and address of the seller.
Regarding a resale certificate, What does residents of Mexico (Mexican retailers) show on the resale
certificate? Mexican retailers who purchase taxable items for resale must show their: (3) - correct answer
✔✔-Federal Taxpayers Registry (RFC) identification number for Mexico on the resale certificate and give
a copy of their Mexican Registration Form to the Texas seller.
-An invoice describing the taxable item purchased and showing the exact street address or office address
from which the taxable item will be resold must be attached to the resale certificate.
-The resale certificate must also state the type business engaged in by the purchaser and the type items
sold in the regular course of business.
,(True or False) A resale certificate may be accepted from the out-of-state retailer even if the Texas
retailer ships or delivers the taxable item directly to a recipient located inside Texas - correct answer
✔✔True
Foreign purchasers, other than purchasers from Mexico, who are not engaged in business in Texas and
do not hold a Texas sales and use tax permit, may issue a properly completed _______ __________, as
described in paragraph (2) of this subsection, in lieu of paying tax on the purchase of taxable items for
sale in the normal course of business when the items are delivered or shipped to a location outside of
Texas but within the United States or Mexico. - correct answer ✔✔resale certificate
A seller is engaged in business in this state if the seller: - correct answer ✔✔promotes a flea market, arts
and crafts show, trade day, festival, or other event in this state that involves sales of taxable items.
A small, stand-alone area or structure that:
(A) is used solely to display merchandise or to submit orders for taxable items from a data entry device,
or both;
(B) is located entirely within a location that is a place of business of another seller, such as a department
store or shopping mall; and
(C) at which taxable items are not available for immediate delivery to a purchaser. - correct answer
✔✔Kiosk
Every retailer, wholesaler, distributor, manufacturer, marketplace provider, or any other person who sells,
leases, rents, or transfers ownership of tangible personal property or performs taxable services for
consideration is known as a... - correct answer ✔✔seller
A seller is further defined as a promoter of a flea market, trade day, or other event that involves the sales
of taxable items is a seller responsible for the collection and remittance of the sales tax that dealers,
salespersons, or individuals collect at such events, unless what? - correct answer ✔✔Unless those
persons hold active sales and use tax permits that the comptroller has issued.
Are sellers, also described as promoters of flea markets, trade day, or other event that involves the sales
of taxable items responsible for the collection and remittance of the sales tax that dealers, salespersons,
or individuals collect at such events? - correct answer ✔✔Yes
,Tangible personal property and taxable services. Except as otherwise provided in Tax Code, Chapter 151,
the sale or use of a taxable item in electronic form instead of on physical media does not alter the item's
tax status. - correct answer ✔✔Taxable item
What kind of property is described as can be seen, weighed, measured, felt, or touched or that is
perceptible to the senses in any other manner, including a computer program as defined in §3.308 of this
title (relating to Computers--Hardware, Computer Programs, Services, and Sales) and a telephone
prepaid calling card, as defined in §3.344 of this title. - correct answer ✔✔Tangible Personal Property
(TPP)
Are computer programs and telephone prepaid calling cards considered Tangible Personal Property
(TPP)? - correct answer ✔✔Yes
Computer programs - Rule 3.308
Telephone prepaid calling cards - Rule 3.344
Sales and use tax due is the debt of whom? - correct answer ✔✔The purchaser
The sales and use tax due is a debt of the purchaser to the seller until... - correct answer ✔✔collected
Unpaid sales or use tax is recoverable by the seller in the same manner as the original sales price of the
taxable item itself, if unpaid, would be recoverable. The comptroller may proceed against either the
seller or purchaser, or against both, until all applicable tax, penalty, and interest due has been... - correct
answer ✔✔paid
]Sales and use tax returns must be filed on forms that the _________ ______________. The fact that a
person does not receive or obtain the correct forms from the comptroller does not relieve a person of
the responsibility to file a sales and use tax return and to remit the required sales and use tax. - correct
answer ✔✔comptroller prescribes
Quarterly filers. Permit holders who have less than ________ in state sales and use tax per quarter to
report may file sales and use tax returns quarterly. The quarterly reporting periods end on March 31,
June 30, September 30, and December 31. - correct answer ✔✔$1,500
, Yearly filers. Permit holders who have less than ________ in state sales and use tax to report during a
calendar year may file yearly sales and use tax returns upon authorization from the comptroller. - correct
answer ✔✔$1,000
Monthly filers. Permit holders who have _________ or more in state sales and use tax per quarter to
report must file monthly sales and use tax returns except for permit holders who prepay the sales and
use tax as provided in subsection (h) of this section. - correct answer ✔✔$1,500
Content of an exemption certificate. An exemption certificate must show: (5) - correct answer ✔✔-The
name and address of the purchaser
-A description of the item to be purchased
-The reason the purchase is exempt from tax
-The signature of the purchaser and the date
-The name and address of the seller
What is the Resale Certificate form number? - correct answer ✔✔Form 01-339
Which certificate should a business obtain for items that your business plans on reselling. You can obtain
your inventory in bulk from a supplier and not pay sales tax. The sales tax is obtained when you sale that
item to a buyer. Anybody in Texas, other states, and Mexico can use this as long as they're registered in
their state/country. - correct answer ✔✔Resale Certificate (Form 01-339)
What is the Exemption Certificate form number? - correct answer ✔✔Form 01-339
Organizations that want to use this have to be qualified. If they are approved, then they can use this to
purchase items and avoid paying sales tax. - correct answer ✔✔Exemption Certificate
