Which tax is levied on the sale of merchandise or services?

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

Answer: (B)

This question focuses on how different taxes are applied, specifically which one is charged at the point of sale on most goods and services. Sales tax is a consumption tax collected by retailers from customers when a purchase is made. The rate is set by government authorities and then sent to the government, making it a tax tied directly to the sale of merchandise or services in many places.

Income tax, in contrast, is paid on earnings from work or investments, not on the act of selling goods. Property tax is charged on the value of owned property like land or buildings, not on a sale itself. Excise tax targets specific goods (like gasoline, tobacco, or alcohol) and is usually applied per unit or per item, rather than broadly imposing a tax on all sales.

So, the tax levied on the sale of merchandise or services is sales tax.