Kinh tế học - Chapter 19: Sales, excise, and property taxes

Chapter 19Sales, Excise, and Property TaxesCompute sales tax on goods sold involving trade and cash discounts and shipping chargesExplain and calculate excise taxSales, Excise, and Property Taxes#19Learning Unit ObjectivesSales and Excise TaxesLU19.1Calculate the tax rate in decimalConvert tax rate in decimal to percent, per $100 of assessed value, per $1,000 of assessed value, and in millsCompute property tax dueSales, Excise, and Property Taxes#19Learning Unit ObjectivesProperty TaxLU19.2Taxes paid on certain goods and servicesSales TaxThe sales tax percent is set by each state. Merchants collect funds and forward them to government agenciesSales TaxCompute sales tax and total price given the following information:Selling price of battery $32Shipping charge $3.50Trade discount 10.50%Sales Tax 5%Check: 100% is base + 5% is tax = 105%1.05 x $21.50 = $22.58 + 3.50 = $26.08Manual calculation 32.00 Price -10.50 Trade discount 21.50 Taxable x .05 1.08 Tax +21.50 Taxable +3.50 Shipping$26.08 Total price w/shippingCalculating Actual SalesActual sales = Total sales 1 + tax rateRegister receipts total $40,000 for the day, which included a 7% sales tax. What are actual sales?$40,000 = $37,383.18 1.07 Check: Sales $37,383.18 x .07 = $2,616. 82$37,383.18 + 2,616.82 = $40,000 Tax is based on a percentage of the retail price of a product or serviceExcise TaxTax imposed on luxury items or nonessentialsExcise TaxAngel Rome bought a fur coat for $5,000. Sales tax is 7% and excise tax is 8%. What is her total cost?Cost $5,000Sales tax $5,000 x .07 = $350Excise tax $5,000 x .08 = $400Total cost $5,750Assessed value - The value of property for the purposes of computing property taxesProperty TaxAssessed value = Assessment rate x Market valueProperty taxes pay for local fire and police protection, schools, etc . They are based on assessed value.Determining the Tax RateTax Rate = Budget needed Total assessed valueStep 2. Identify tax rateTown budget needsTotal assessed valueStep 3. Calculate property tax dueTax rate x assessed value (Step 1 x Step 2)Step 1. Compute assessed valueAssessment rate x Market valueCalculating Property TaxCalculating Property Tax1. Calculate assessed value of Bill’s home.40 x $210,000 = $84,000From the following facts: (1) calculate assessed value of Bill’s home; (2) calculate the tax rate for the community in decimal (to nearest ten thousandths); (3) convert the decimal to (a) %, (b) per $100 of assessed value, (c) per $1,000 of assessed value, and (d) in mills (to nearest hundredth); and (4) calculate the property tax due on Bill’s home in decimal, per $100, per $1,000, and in mills.Given:Assessed market value 40% Total budget needed $176,000Market value of Bill’s home $210,000 Total assessed value $1,910,000Calculating Property Tax.0922 = 9.22%.0922 x 100 = $9.22.0922 x 1000 = $92.20.0922 .001 = 92.2 Mills (or .0922 x 1,000)3. Convert the decimal to (a) %, (b) per $100 of assessed value, (c) per $1,000 of assessed value, and (d) in mills (to nearest hundredth)2. Calculate the tax rate for the community in decimal (to nearest ten thousandths) 176,0001,910,000= .0922 per dollarCalculating Property Tax .0922 x $84,000 = $7,744.80 $9.22 x 840 = $7,744.80$92.20 x 84 = $7,744.80 92.20 x .01 x $84,000 = $7,744.804. Calculate the property tax due on Bill’s home in decimal, per $100, per $1,000, and in mills.Expressing Tax Rate Per $100 of Per $1,000 of By percent assessed value assessed value In mills 6.48% $6.48 $64.80 64.80 Per $100 of Per $1,000 of By percent assessed value assessed value In mills$63,000 x 6.48% $63,000 = 630 $63,000 = 63 64.80 x .001x $100 $1,000 $63,000 630 x $6.48 63 x $64.80 $4,082.40 $4,082.40 $ 4,082.40 $ 4,082.40