Which of the Following Is a Tax

question 101

Multiple Choice

Which of the following is a tax?
I. A 1% special sales tax for funding local road construction.
II. A fee paid to the state for a license to practice as an attorney.
III. An income tax imposed by Philadelphia on persons working within the city limits.
IV. A special property assessment for installing a new water system in the taxpayer's neighborhood.

• A) Only I is correct.
• B) Only IV is correct.
• C) Only III is correct.
• D) III and IV are correct.
• E) I and III are correct.

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Definitions:

Nonnegotiable

Pertaining to something that cannot be transferred or assigned from one party to another, such as a nonnegotiable instrument or document.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.

Loan

A sum of money that is borrowed and is expected to be paid back with interest.

Prime Rate

The interest rate that commercial banks charge their most creditworthy customers, often used as a benchmark in lending rates.