S Corp.buys tangible personal property for $100,000 in State Z that imposes a sales tax of 5 percent.S intends to use $20,000 of the property in its business and resell the remaining $80,000.What is S's sales tax liability?
A)$5,000
B)$4,000
C)$1,000
D)$0
E)Some other amount

Question

Quizplus · Accepted Answer

S Corp is liable for sales tax only on the $20,000 worth of property it intends to use in its business, not on the $80,000 intended for resale. The sales tax on $20,000 at 5% is $1,000.

S CorpBuys Tangible Personal Property for $100,000 in State Z That