Sales, Excise, And Property Taxes Chapter 8 Test Bank

Chapter 8

Sales, Excise, and Property Taxes

True/False Questions
 

1. Sales tax is required in all states. 
True    False

2. Sales tax is collected by wholesalers. 
True    False

3. Sales tax usually is not taken on edible foods. 
True    False

4. Sales tax is never rounded to the nearest cent. 
True    False

5. In the portion formula, the sales tax represents the portion. 
True    False

6. Sales tax is not taken on trade discounts but is taken on cash discounts. 
True    False

7. Sales tax is taken on shipping charges. 
True    False

8. All charitable organizations pay a sales tax. 
True    False

9. Total sales including sales tax divided by (100% + sales tax) equals actual sales. 
True    False

10. Excise tax and sales tax are really the same tax. 
True    False

11. Excise tax is based on a percent of the retail price of a product or service. 
True    False

12. Excise tax is only on goods or services that are not luxury items. 
True    False

13. Excise tax is a tax paid in addition to sales tax. 
True    False

14. Assess value equals assessment rate × market value. 
True    False

15. Tax rates may be expressed in more than one way. 
True    False

16. The tax rate per dollar is never rounded up. 
True    False

17. Tax rates may be expressed only per $100 of assessed valuation. 
True    False

18. A mill is 1/10 of a cent. 
True    False

19. To represent the number of mills as a tax rate per dollar, the tax rate is multiplied by .001. 
True    False

20. Total property tax due is equal to the tax rate times the total assessed valuation. 
True    False

21. In the portion formula, total assessed valuation in the calculation of property tax due is the portion. 
True    False

22. Tax rate per dollar is calculated by taking the budget needed divided by the total assessed value. 
True    False

Multiple Choice Questions
 

23. Sales tax at a supermarket in the District of Columbia is collected on: 
A. Doughnuts
B. Cereal
C. Coffee
D. Soap detergent
E. None of these

24. Sales tax is taken on: 
A. Trade discounts
B. Cash discounts
C. Shipping charges
D. Selling price minus trade discount
E. None of these

25. Sales tax rates are: 
A. The same in all states
B. Different in many states
C. Exempt from all businesses
D. Not used by retailers, only wholesalers
E. None of these

26. Total sales of $400,000 that included a 6% sales tax yields actual sales of: 
A. $42,800
B. $37,537.58
C. $377,358.49
D. $48,200
E. None of these

27. Excise tax is not applied to: 
A. Distilled spirits
B. Beer
C. Wine
D. Doughnuts
E. None of these

28. Jack Matthew bought a new diamond ring for $20,000. Sales tax is 5% with a 10% excise tax. The total price including taxes that Jack paid is: 
A. $20,000
B. $08,000
C. $21,000
D. $22,000
E. None of these

29. Which of the following are examples of items excluded from excise tax? 
A. Cigarettes
B. Beer
C. Wine
D. Distilled spirits
E. None of these

30. Which of the following is subject to sales tax in the District of Columbia? 
A. Roast beef
B. Tomatoes
C. Shampoo
D. Milk
E. None of these

31. Assessed valuation is equal to the assessment rate: 
A. Divided by the market value
B. Times the book value
C. Times the market value
D. Plus the market value
E. None of these

32. A home with a market value of $240,000 is assessed at 40% of the market value.
The assessed value is: 
A. $144,000
B. $96,000
C. $69,000
D. $9,600
E. None of these

33. Usually assessed value is rounded to the: 
A. Nearest cent
B. Nearest tenth
C. Nearest percent
D. Nearest dollar
E. None of these

34. The tax rate per dollar in a town can be calculated by dividing the total assessed value into: 
A. Mills
B. Budget needed
C. Market value
D. Appraised value
E. None of these

35. Personal property items do not include: 
A. Jewelry
B. Land
C. Autos
D. Furniture
E. None of these

36. A tax rate of $.0711 in decimal expressed per $1,000 of assessed valuation is equal to: 
A. $71.1
B. $7.11
C. $.0711
D. $.00711
E. None of these

37. Given a tax rate of $.8231 and total property tax due of $12,510, the total assessed valuation rounded to the nearest dollar is: 
A. $1,508
B. $150,089
C. $15,089
D. $5,089
E. None of these

38. The tax rate of $.0984 in decimal can be expressed as how many mills? 
A. 9.84
B. 90.84
C. 98.4
D. 9,840
E. None of these

39. Given a tax rate of $.0824 and an assessed valuation of $74,900, the total property tax due is: 
A. $6,111.67
B. $6,110.67
C. $6,071.67
D. $6,171.76
E. None of these

40. The tax rate of $.6943 in decimal can be expressed per $100 as: 
A. $6.943
B. $69.43
C. $690.3
D. $69.43 mills
E. None of these

41. Bill Jones bought a fishing rod that sells for $70 subject to a 6% sales tax and an excise tax of 10%. The total amount Bill paid for the rod is: 
A. $77.00
B. $74.20
C. $81.20
D. $75.00
E. None of these

42. Jen Rich bought a new Toyota for $18,200 that included a 5% sales tax. The actual cost of the car (round to the nearest dollar) before the tax is: 
A. $17,334
B. $17,333
C. $17,335
D. $08,110
E. None of these

43. Moe Blunt came into Jan's Hardware Store and purchased a hammer for $16.75 plus a 5% tax. The total sales plus tax was: 
A. $17.55
B. $17.54
C. $17.56
D. $17.62
E. None of these

44. Judy Ring purchased a watch with a retail price of $8,000. She would still have to pay a sales tax of 6% and an excise tax of 10%. Since the jeweler would be shipping this, there would be an additional $20 shipping charge. The total purchase price of this watch for Judy is: 
A. $8,880
B. $8,936
C. $8,516
D. $8,496
E. None of these

45. Mike's condo has a market value of $310,000. The property in Mike's area is assessed at 40% of the market value. The tax rate is $145.10 per $1,000 of assessed valuation. The tax for Mike is: 
A. $16,992.40
B. $7,999.30
C. $7,999.40
D. $17,992.40
E. None of these

46. In the community of Borg, the market value of a home is $080,000. If the assessment rate is 45%, the assessed value is: 
A. $542,857
B. $292,308
C. $85,500
D. $85,505
E. None of these

47. The county of Blue needs $800,000 from property tax to meet its budget requirements. The total value of assessed property in Blue is $140,000,000. The tax rate of Blue in mills to nearest hundredth is (be sure to round the tax rate to the nearest hundred thousandth before converting to mills): 
A. 5.71
B. 57.24
C. 571.24
D. 17.50
E. None of these

48. Bill Shass pays a property tax of $5,800. In his community, the tax rate is 48 mills. Bill's assessed valuation to the nearest dollar is: 
A. $278,400
B. $120,338
C. $278,004
D. $120,833
E. None of these

49. The home of Russell Slater is assessed at $140,000. The tax rate is 11.8 mills. The actual amount of tax on Russell's home is: 
A. $1,562
B. $1,652
C. $1,462
D. $1,362
E. None of these

50. The building of Jim's Hardware is assessed at $109,000. The tax rate is $86.95 per $1,000 of assessed valuation. The tax due is: 
A. $9,477.55
B. $947.75
C. $8,695.45
D. $8,659.54
E. None of these

 51. Becky bought a new Apple computer for $1,205. The purchase price included a 6% sales tax. What is the actual selling price of the computer?

1. $1,132.08
2. $1,277.30
3. $1,200.00
4. $1,136.79
5. None of these

52. Kris bought a new fur coat for $8,000. She must pay 5% sales tax and 7% excise tax. The furrier is shipping the coat, so Kris must also pay a $15.00 insurance charge. What is the total purchase price of the coat?

A. $8,960

B. $8,400

C. $8,975

D. $8,560

E. None of these

53. In the community of Chesterfield, the market value of the average home is $180,000. The assessment rate is 35%. What is the assessed value?

A. $63,000

B. $51,429

C. $243,000

D. $60,000

E. None of these

54. The municipality of Waterloo needs $915,000 from property tax to meet its budget. The

total value of assessed property in Waterloo is $14,000,000. What is the tax rate per dollar (round to nearest thousandths)?

A. $.071

B. $.07

C. $.0655

D. $.065

E. None of these

55. Best Buy has a warehouse with a market value of $5,000,000. The property in Best Buy’s area is assessed at 40% of the commercial value. The tax rate is $105.10 per $1,000 assessed value. What does Best Buy pay in property tax?

A. $200,000

B. $210,000

C. $250,000

D. $110,000

E. None of these

Short Answer Questions
 

56. 1. Assessed valuation
2. Excise tax
3. Mills
4. Property tax
5. Sales tax
6. Tax rate per dollar
7. Market value
A. 1/10 of a cent.
B. Tax to raise revenue for cities, schools, etc.
C. Budget needed divided by total assessed value.
D. Value of property to calculate property taxes.
E. Current value today.
F. Tax on luxury items.
G. A tax on consumers for certain merchandise or services 

57. Calculate the assessed valuation:
   

58. Calculate the tax rate in decimal form (six decimal places):
   

59. Complete (express answers to nearest hundredth):
  
A. _______________
B. _______________
C. _______________
D. _______________
   

60. Calculate amount of tax due:
  
A. _______________
B. _______________
C. _______________ 

61. Calculate (A) actual sales and (B) sales tax liability:
Total sales: $23,152.81 (includes a 5% tax.)
A. ____________
B. _____________ 

62. Calculate assessed value:
Given: property tax $6,100; 26 mills tax rate 

63. Calculate the total purchase price:
Given:
   

64. John's Market is assessed for $95,000. The current tax rate is $92.45 per $1,000 of assessed value. Calculate the tax due. 

65. Total sales for Appliance Center were $205,000 for the week. These sales included a 6% sales tax. What were the actual sales? 

66. Ralph's home is assessed at $80,000. The tax rate is 16.52 mills. What is the actual amount of tax on Ralph's home? 

67. Frank Smith pays a property tax of $2,200. The current tax rate is 48 mills. What is Smith's assessed value? (Round to the nearest dollar.) 

68. Bea Bonnet bought a new Apple computer for $1,250.99. This price included a 6% sales tax. What is the actual selling price before the tax as well as the sales tax amount? 

69. Carol Reeve bought a new fur coat for $8,000. She must pay a 5% sales tax and a 7% excise tax. The furrier is shipping the coat, so Carol must also pay a $15 shipping charge. What is the total purchase price of the coat? 

70. In the community of Reese, the market value of a home is $180,000. The assessment rate is 35%. What is the assessed value? 

71. French County needs $915,000 from property tax to meet its budget. The total value of assessed property in French is $140,000,000. What is the tax rate of French? Round to the nearest ten thousandth. Express that rate in mills. 

72. The home of Al Gard is assessed at $70,000. The tax rate is 6.15 mills. What is the tax on Al's home? 

73. Pete's Warehouse has a market value of $5,000,000. The property in Pete's area is assessed at 40% of the market value. The tax rate is $105.10 per $1,000 of assessed valuation. What is Pete's property tax? 

74. Calculate the assessed valuation:
   

75. Calculate the tax rate in decimal form (six decimal places):
   

76. Calculate the assessed valuation:
   

77. Calculate the tax rate in decimal form (six decimal places):
   

78. Complete (express answers to nearest hundredth):
   

79. Complete (express answers to nearest hundredth):
   

80. Calculate amount of tax due:
   

81. Calculate amount of tax due:
   

82. Calculate (A) actual sales and (B) sales tax liability.
Total sales: $1,200.15 (includes a 5% tax) 

83. Calculate (A) actual sales and (B) sales tax liability.
Total sales: $1,110.50 (includes a 5% tax) 

84. Calculate assessed value:
Given: property tax $5,200
32 mills tax rate 

85. Calculate the total purchase price:

Given: retail price $30,000
Sales tax 7%
Excise tax 10%

86. The market value of a home in San Francisco is $200,000. Find the assessed value if the assessment rate is 64%. 

87. The county of Rolly needs $910,000 from property tax to meet its budget requirements. The total value of assessed property in Rolly is $150,000,000. What would the tax rate of Rolly be (to five decimal places)? Express the rate in mills. (Round off to two decimal positions if necessary.) 

88. The home of Tom Burke is assessed at $60,000. The tax rate is 15.18 mills. What is the actual amount of tax on Tom's home? 

89. The home of Edward Sloan is assessed at $72,000. The tax rate is $148.50 per $1,000 of assessed valuation. Can you calculate Edward's tax that is due? 

90. Al's Garage has a market value of $425,000. The property in Al's area is assessed at 40% of the market value. The tax rate is $148.50 per $1,000 of assessed valuation. Find the tax for Al. 

91. Alfred Slide owns a toy store in which there is a state sales tax of 4%. For the week of December 9, sales were $154,000, and that included the 4% sales tax. Alfred would like a breakdown of actual sales as well as the amount of sales tax owed to the state. Can you help Alfred? 

92. Alfred Slide owns a toy store in which there is a state sales tax of 4%. For the week of December 9, sales were $154,000, and that included the 4% sales tax. Assuming that Slide's sales did not include sales tax, what would have been Alfred's tax liability? 

93. Bonnie Flow pays a property tax of $3,000. In her community, the tax rate is 58 mills. Can you calculate for Bonnie her assessed valuation? (Round to the nearest dollar.) 

94. In the community of Rosen, the market value of a home is $90,000. Find the assessed value if the assessment rate is 71%. 

95. John Rich purchased a ring for a retail price of $13,000. There is a sales tax of 7% along with a 10% excise tax. What is the total cost to John? 

96. Rick Presser’s home has a market value of $260,000. His assessed rate is 45%. What is the assessed value?

97. Stacy purchased a new fur coat at a cost of $1,599. She paid 8% excise tax in addition to a 9.825% local sales tax. Her insurance costs were 5% of the retail price. How much did Stacy pay for her fur coat?

98. Due to a change in assessment, Saint Louis County raised its assessed rate to 40%. The average price of a home in the county is $179,000. What will the average household assessment be in Saint Louis County?

99. The budget for Sunset Hills, Missouri, is approximately $68 million. The total assessed value of all property in Sunset Hills is $558 million. What is the tax rate per dollar in Sunset Hills?

100. Ford Motor Company decided against building a new plant in California because of the high cost of taxes. The state of California proposed an assessed rate of 52% of the estimated market value of the plant. The tax rate proposal was $233.00 per $1,000 of assessed value. What would Ford Motor pay in property taxes per year if it decided to build a $25 million plant?