Usage of which tax can be seen as a charge for the right to use purchased goods within one’s own state?

Prepare for CGFM Exam 1 – Governmental Environment. Utilize flashcards and multiple-choice questions with explanations and hints. Ace your exam!

The correct answer is the use tax, which is specifically designed as a charge for the privilege of using goods that have been purchased outside of one's own state or without paying the appropriate sales tax. It applies to items that individuals or businesses acquire from out-of-state vendors but use within their home state. The purpose of this tax is to level the playing field between in-state and out-of-state sellers, ensuring that local merchants are not disadvantaged by competition from sellers who may not be charging sales tax.

Sales tax, while related, is typically imposed at the point of sale for goods purchased within the state, rather than for the use of goods acquired elsewhere. Income tax pertains to earnings and does not directly address the usage of goods. Property tax is a tax based on property ownership rather than the use of purchased items. Use tax fills the gap to ensure that revenue is collected on these transactions that might otherwise escape taxation.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy