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Patty Owns and Operates Pretty Party People Inc, Which Sells

Question 37

Multiple Choice

Patty owns and operates Pretty Party People Inc, which sells party supplies and caters special events.The last year has been reasonably successful, but looking over the records, Patty notice that her company paid a very large amount of money for something called a "harmonized sales tax." As a result of asking her accountant, Patty learned that the harmonized sales tax


A) is a single tax that combines a federal sales tax and a provincial sales tax.
B) is a single federal tax that replaces several smaller federal taxes that previously existed.
C) is a single tax that replaces two old taxes, one that applied to the sale of goods and another that applied to the sale of services.
D) requires an employer to deduct its employees' income tax from their pay and forward it to the government.
E) is a tax of 5 percent that several provinces agreed to adopt; each of those provinces previously had a sales tax, but the rates varied between 3 percent and 8 percent.

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