Which of the following is true regarding use taxes?
A)A use tax is relatively easy to enforce compared to a sales tax.
B)Use taxes attempt to eliminate any tax advantage of purchasing goods out of state.
C)Use taxes encourage taxpayers to buy goods out of state to avoid paying sales tax in their home state.
D)A use tax is generally a progressive tax.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

Use taxes attempt to eliminate any tax advantage of purchasing goods out of state by imposing a tax on the use of goods purchased out of state that would have been subject to a sales tax if bought in state. This helps to create a level playing field between local businesses that have to charge sales tax and out-of-state businesses that do not have to charge sales tax. The other choices are incorrect as use taxes are difficult to enforce (A), discourage out-of-state purchases to some extent (C), and are not necessarily progressive (D).

Which of the Following Is True Regarding Use Taxes