Which tax is based on the value of the property owned by a person or by a business?

• A. Sales Tax
• B. Property Tax
• C. Income Tax
• D. Tariff

Answer: (B)

Property tax is a tax tied to the value of property owned by a person or business. Local governments assess how much real estate (like homes and commercial buildings) and sometimes personal property (like business equipment) is worth, then apply a tax rate to that value. The bill reflects the property's assessed value and the local rate, and the money funds services such as schools, police, and roads. For example, a home with an assessed value of $250,000 and a tax rate of 0.8% would generate about $2,000 in annual property tax.

Sales tax, in contrast, is charged on goods and services at the point of purchase and is based on the transaction amount. Income tax is charged on earnings or income. Tariffs are taxes on imported goods. This question points to property tax because it is specifically based on the value of property owned.