X Corp.buys property in State X that imposes a sales tax of 4 percent.X transports the property into State Y for use in its business.State Y imposes a sales tax of 6 percent.As a result of this transaction, State Y will likely impose
A)A personal property tax
B)A sales tax
C)An ad valorem tax
D)A use tax
E)None of the above

Question

Quizplus · Accepted Answer

When property is transported into a state for use in business, the state typically imposes a use tax. In this case, since X Corp. purchased the property in a state with a lower sales tax and then transported it into a state with a higher sales tax, State Y will likely assess a use tax on the property.

X CorpBuys Property in State X That Imposes a Sales Tax