Test Bank for South-
Western Federal
Taxation 2025 Essentials of
Taxation Individuals
and Business Entities, 26e
Annette Nellen, Andrew
Cuccia, Mark Persellin,
James Young (All
Chapters Download link at
the end of this file)
True / False
1. The Medicare component of the FICA tax (1.45% on wages) is progressive since the tax due increases
as wages increase.
a. True
b. False
ANSWER: False
,Name: Class: Date:
CH 1 Introduction to Taxation
2. The Federal estate and gift taxes are examples of progressive rate taxes. a. True
b. False
ANSWER: True
3. The Federal excise tax on gasoline has a proportional effect on all taxpayers (that is, neither
progressive or regressive). a. True
b. False
ANSWER: False
4. Currently, the Federal corporate income tax is less progressive than the individual income tax. a. True
b. False
ANSWER: True
5. Mona inherits her mother’s personal residence, which she converts to a furnished rental house. These
changes should affect the amount of ad valorem property taxes levied on the properties. a. True
b. False
ANSWER: True
6. A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.
a. True
b. False
ANSWER: False
7. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not
remain the same. a. True
b. False
ANSWER: True
8. The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem
tax on business use personalty. a. True
, Name: Class: Date:
CH 1 Introduction to Taxation
b. False
ANSWER: True
9. An excise tax is often used to try to influence behavior.
a. True
b. False
ANSWER: True
10. There is a Federal excise tax on hotel occupancy.
a. True
b. False
ANSWER: False
11. The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the
United States. a. True
b. False
ANSWER: False
12. The amount of the state excise taxes on gasoline varies from state to state. a. True
b. False
ANSWER: True
13. Not all of the states that impose a general sales tax also have a use tax. a. True
b. False
ANSWER: False
14. Sales made over the internet are not exempt from the application of a general sales (or use) tax. a.
True
b. False
ANSWER: True
Western Federal
Taxation 2025 Essentials of
Taxation Individuals
and Business Entities, 26e
Annette Nellen, Andrew
Cuccia, Mark Persellin,
James Young (All
Chapters Download link at
the end of this file)
True / False
1. The Medicare component of the FICA tax (1.45% on wages) is progressive since the tax due increases
as wages increase.
a. True
b. False
ANSWER: False
,Name: Class: Date:
CH 1 Introduction to Taxation
2. The Federal estate and gift taxes are examples of progressive rate taxes. a. True
b. False
ANSWER: True
3. The Federal excise tax on gasoline has a proportional effect on all taxpayers (that is, neither
progressive or regressive). a. True
b. False
ANSWER: False
4. Currently, the Federal corporate income tax is less progressive than the individual income tax. a. True
b. False
ANSWER: True
5. Mona inherits her mother’s personal residence, which she converts to a furnished rental house. These
changes should affect the amount of ad valorem property taxes levied on the properties. a. True
b. False
ANSWER: True
6. A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.
a. True
b. False
ANSWER: False
7. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not
remain the same. a. True
b. False
ANSWER: True
8. The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem
tax on business use personalty. a. True
, Name: Class: Date:
CH 1 Introduction to Taxation
b. False
ANSWER: True
9. An excise tax is often used to try to influence behavior.
a. True
b. False
ANSWER: True
10. There is a Federal excise tax on hotel occupancy.
a. True
b. False
ANSWER: False
11. The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the
United States. a. True
b. False
ANSWER: False
12. The amount of the state excise taxes on gasoline varies from state to state. a. True
b. False
ANSWER: True
13. Not all of the states that impose a general sales tax also have a use tax. a. True
b. False
ANSWER: False
14. Sales made over the internet are not exempt from the application of a general sales (or use) tax. a.
True
b. False
ANSWER: True
