Which term refers to the tax imposed on the purchase of goods or services?

• A. Income tax
• B. Property tax
• C. Excise duty
• D. Sales tax

Answer: (D)

Verified step by step guidance

1. Understand the definitions of each tax type: Income tax is a tax on individual or corporate earnings; Property tax is a tax on property ownership; Excise duty is a tax on specific goods, often included in the price; Sales tax is a tax imposed on the purchase of goods or services at the point of sale.
2. Identify the key phrase in the question: 'tax imposed on the purchase of goods or services' which indicates a tax applied during a transaction.
3. Recall that sales tax is directly added to the price of goods or services when consumers buy them, making it a transaction-based tax.
4. Differentiate sales tax from excise duty, which is usually included in the price of specific goods (like alcohol or tobacco) rather than applied broadly at purchase.
5. Conclude that the term referring to the tax imposed on the purchase of goods or services is 'Sales tax'.