14
QuizMultiple Choice

Tax Basics

Question 14 • Financial Math - MA2007

Which of the following statements best describes the difference between sales tax and property tax?

Answer
A
Sales tax is applied to items as they are purchased while property tax is applied to items already owned.
B
Sales tax is applied repeatedly while property tax is paid only once for as long as you own the item.
C
Sales tax can be applied to a new speed boat while property tax cannot.
D
Sales tax is strictly meant for food and consumables while property tax is meant for non-food items.

Explanation

Sales tax is charged when you buy a taxable item. Property tax is charged on property you own, often on a recurring basis. Therefore, choice A—sales tax is applied to items as they are purchased, while property tax is applied to items already owned—best describes the difference. Property tax is not generally a one-time payment, so choice B is incorrect.

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