Which is an example of a sales tax?
a. 5 percent charged on purchases of goods such as books or chairs
b. 5 percent charged on imported goods
c. 10 percent charged on alcohol or tobacco products
d. 20 percent charged on the value of a home

A. 5% charged on purchases of goods such as books or chairs.

Explanation:

Conventional or retail sales taxes are only charged to the end user of a good or service. Because the majority of goods in modern economies pass through a number of stages of manufacturing, often handled by different entities, a significant amount of documentation is necessary to prove who is ultimately liable for sales tax. For example, say a sheep farmer sells wool to a company that manufactures yarn. To avoid paying the sales tax, the yarn maker must obtain a resale certificate from the government saying that it is not the end user. The yarn maker then sells its product on to a garment maker, which must also obtain a resale certificate. Finally, the garment maker sells fuzzy socks to a retail store, which will charge the customer sales tax along with the price of said socks.

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