Test Bank for South-

Test Bank for South- Western Federal Taxation 2023 Essentials of Taxation Individuals and Business Entities, 26e Annette Nellen, Andrew Cuccia, Mark Persellin, James Young (All Chapters Download link at the end of this file) 1 / 3

Name:

Class:

Date:

CH 1 Introduction to Taxation

True / False

• The Medicare component of the FICA tax (1.45% on wages) is progressive since the tax due increases as wages

increase.

• True
• False

ANSWER: False

• The Federal estate and gift taxes are examples of progressive rate taxes.
• True
• False

ANSWER: True

• The Federal excise tax on gasoline has a proportional effect on all taxpayers (that is, neither progressive or regressive).
• True
• False

ANSWER: False

• Currently, the Federal corporate income tax is less progressive than the individual income tax.
• True
• False

ANSWER: True

• Mona inherits her mother’s personal residence, which she converts to a furnished rental house. These changes should

affect the amount of ad valorem property taxes levied on the properties.

• True
• False

ANSWER: True

• A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.
• True
• False

ANSWER: False

• Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the same.
• True
• False

ANSWER: True

• The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business

use personalty.

• True
• False

ANSWER: True

• An excise tax is often used to try to influence behavior. 2 / 3

Name:

Class:

Date:

CH 1 Introduction to Taxation

• True
• False

ANSWER: True

• There is a Federal excise tax on hotel occupancy.
• True
• False

ANSWER: False

• The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the United States.
• True
• False

ANSWER: False

• The amount of the state excise taxes on gasoline varies from state to state.
• True
• False

ANSWER: True

• Not all of the states that impose a general sales tax also have a use tax.
• True
• False

ANSWER: False

• Sales made over the internet are not exempt from the application of a general sales (or use) tax.
• True
• False

ANSWER: True

• Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.
• True
• False

ANSWER: True

• States impose either a state income tax or a general sales tax, but not both types of taxes.
• True
• False

ANSWER: False

• A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no

such taxes.

• True
• False

ANSWER: False

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