Which of the following statements concerning state sales tax is correct?

Question

States that have a state income tax do not collect sales taxes.

Only the federal government is authorized to tax gasoline.

All 50 states collect sales tax.

Some states impose so-called sin taxes.

Answer 1

The correct statement concerning state sales tax is:

Some states impose so-called sin taxes.

Sin taxes are typically imposed on goods that are seen as harmful or undesirable, such as alcohol, tobacco, and sometimes certain sugary beverages.

To clarify the other statements:

1. States that have a state income tax often also collect sales taxes; there is no rule that prevents a state from having both.
2. The federal government does not have exclusive authority to tax gasoline; states also impose their own taxes on gasoline.
3. Not all 50 states collect sales tax; for example, there are states like Delaware, Montana, New Hampshire, and Oregon that do not have a statewide sales tax.