Question

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

a. Tax is applied to items as they are purchased while property tax is applied to items already taxed.
b. Tax is applied repeatedly while property tax is paid only once for as long as you own the item.
c. Tax can be applied to a new speed boat while property tax is strictly meant for food and consumables.
d. Tax is strictly meant for food and consumables while property tax is meant for non-food items.

Answer 1

Sales tax is charged at the point of sale as a percentage of the purchase price, while property tax is an annual or semi-annual tax imposed on the value of real estate. The correct answer is a.

Step-by-step explanation:

The difference between sales tax and property tax is primarily based on the nature of the goods or assets being taxed and the point at which the tax is assessed. Sales tax is a tax assessed on retail sales of goods and services at the point of purchase, and its rate is expressed as a percentage of the sale price. In contrast, property tax is imposed on the value of real estate and is based on the assessed value of the property. Unlike sales tax, property tax is not applied at the time of a sale but annually or semi-annually, depending on the local government's tax schedule.

Tax is applied to items as they are purchased (sales tax) while property tax is applied to items already taxed (meaning, on assets that have been subject to sales tax previously when purchased).