14
QuizMultiple Choice

Business and Government — Test

Question 14 • Economics

What is the difference between an excise tax and a sales tax?

Answer
A
Excise taxes apply to most items and sales taxes apply to certain items.
B
Excise taxes apply to certain items and sales taxes apply to most items.
C
Excise taxes are collected by the state and sales taxes are collected by cities.
D
Excise taxes are collected by cities and sales taxes are collected federally.

Explanation

An excise tax is charged on specific goods or activities, such as gasoline or cigarettes. A sales tax generally applies to purchases of many goods and services. So the correct choice is “Excise taxes apply to certain items and sales taxes apply to most items.”

AI-written and checked against the verified answer.

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