Severance Taxes, as a Source of State Revenues, Are Popular

question 27

Multiple Choice

Severance taxes, as a source of state revenues, are popular

• A)in states that have a lot of natural resources. They help keep income, property, and sales taxes relatively low and eventually those taxes are paid mostly by out-of-state users.
• B)with resource-rich states, but the rates are set by the national government.
• C)in states like Virginia and Washington, but they are unused in Alaska and Wyoming because the price of natural resources is constantly changing due to market conditions.
• D)because they exempt natives (in-staters)from the tax.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Common Stock

A type of equity security that represents ownership in a corporation, with rights to vote on corporate matters and receive dividends.

Consolidated Income Statement

A financial statement that summarizes the revenue, expenses, and profits of a parent company and its subsidiaries.

Bonds Payable

A long-term debt instrument issued by a company or government agency, promising to pay its holder a specified sum of money at a future date plus periodic interest payments.