Final answer:
The statement is true; colonists were opposed to the ways the tax money was applied because they lacked representation in British Parliament, which led to the revolutionary slogan 'no taxation without representation'.
Step-by-step explanation:
The statement that colonists did not necessarily object to the principle of taxation, but rather to how the tax money would be applied is true. During the period leading up to the American Revolution, many colonists were upset because they were being taxed by the British Parliament in which they had no direct representation. This issue was encapsulated in the famous phrase 'no taxation without representation'. Although the colonists understood the need for taxes to support government and services, they believed that they should have a say in the legislative process that determined the taxes they paid.