Question

Which type of tax is based on the retail price of goods owned, possessed, or consumed within a state that were NOT purchased within the state?

A) Sales tax
B) Excise tax
C) Income tax
D) Use tax

Answer 1

The tax based on the retail price of goods consumed within a state but not purchased there is known as use tax.

Step-by-step explanation:

The type of tax that is based on the retail price of goods owned, possessed, or consumed within a state that were not purchased within the state is known as use tax. This type of tax is applied to items that are bought from outside the state for use within the state, especially when sales tax has not been applied at the point of purchase. Use tax is a companion to sales tax and is intended to prevent people from avoiding sales tax by purchasing goods from outside their state of residence.