Question

Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $2,700 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence where she will use the property. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax liability?

A. $0.
B. $135 to Virginia.
C. $135 sales tax to Virginia and $27 use tax to Maryland.
D. $162 to Maryland.
E. $135 sales tax to Virginia and $27 use tax to Maryland is Incorrect

Answer 1

B. $135 to Virginia

Step-by-step explanation:

The computation of the Roxy tax liability is shown below:

Roxy tax liability = Purchase value of tax rate × Virginia's sales tax rate

= $2,700 × 5%

= $135

The tax is paid by the individual and not the company. So, so company owes only sales tax

All other information which is given is not relevant. Hence, ignored it