TAX 4001 Exam with Questions and 100%
Correct Answers
Excise taxes - ANSWER levied by federal and state governments on exchanges of
specified commodities (oil, alcohol, phone service, and tobacco) or services.
Who are excise taxes levied on? - ANSWER producers, resellers or consumers
Are excise taxes proportional, regressive or progressive? - ANSWER Proportional they may vary
greatly from state to state.
What are Sales and Use Taxes? - ANSWER Major source of income from most state and
local governments, and cover a broad base of transactions.
Sales and Use taxes rates are? - ANSWER Proportional and collected by retailers.
What is a use tax? - ANSWER A use tax is imposed on items bought in a lower sales tax locality
and transported for use in another locality.
Which states impose use taxes? - ANSWER Every state that imposes a sales tax also imposes
a use tax.
The Use tax rate is usually the same as? - ANSWER Sales tax rate
Value Added Tax (VAT) - ANSWER a sales tax levied on the value added at each stage
of production.
Correct Answers
Excise taxes - ANSWER levied by federal and state governments on exchanges of
specified commodities (oil, alcohol, phone service, and tobacco) or services.
Who are excise taxes levied on? - ANSWER producers, resellers or consumers
Are excise taxes proportional, regressive or progressive? - ANSWER Proportional they may vary
greatly from state to state.
What are Sales and Use Taxes? - ANSWER Major source of income from most state and
local governments, and cover a broad base of transactions.
Sales and Use taxes rates are? - ANSWER Proportional and collected by retailers.
What is a use tax? - ANSWER A use tax is imposed on items bought in a lower sales tax locality
and transported for use in another locality.
Which states impose use taxes? - ANSWER Every state that imposes a sales tax also imposes
a use tax.
The Use tax rate is usually the same as? - ANSWER Sales tax rate
Value Added Tax (VAT) - ANSWER a sales tax levied on the value added at each stage
of production.
