Acct 224 Week 1 You Decide
Taxes
Dorothy Cartwright
DeVry University
Taxes
As the owner of PSG Tax Services, Inc. it is my duty to provide the knowledge and understanding of taxes to my clients. This week I had the pleasure of meeting Jackson and Kara Erb. The newlywed couple showed drastic signs of having no knowledge of taxes or why the government issues taxes.
A “tax can be defined as a payment to support the cost of government” (Jones, 2014). Taxes are implemented by our government to raise revenues for specific purposes. Our government implements local, state, and federal taxes. Each jurisdiction is subjected to the authority of the government above them.
Local governments establish their own tax rate but are subjected to the authority of their states governments. Local governments include townships, cities, counties, municipalities, and school districts. Local governments rely on ad valorem taxes. Ad valorem taxes are real property taxes (“land and whatever is erected or growing on the land or permanently affixed to it” (Jones, 2014).) and personal property taxes (homes and buildings). A tax assessor will evaluate property yearly to determine the market value.
State governments rely on sales tax and income tax for revenues. Each state establishes their own tax rates but are subjected to the authority of the federal government. Sales tax is a tax percentage on the retail price of tangible property. Sales taxes are implemented on consumer goods and/or consumer services. The seller of the goods or services must collect the taxes and submit them to the state government. Some states have a complementary use tax. Use tax is implemented if the owner of the goods did not pay taxes when they purchased the goods. Excise tax is implemented on retail sales of goods. Gas, alcohol, and cigarettes are examples of excise tax on consumer goods. Hotel accommodations and car rentals are examples of excise tax on consumer services. Personal income taxes are a
Dorothy Cartwright
DeVry University
Taxes
As the owner of PSG Tax Services, Inc. it is my duty to provide the knowledge and understanding of taxes to my clients. This week I had the pleasure of meeting Jackson and Kara Erb. The newlywed couple showed drastic signs of having no knowledge of taxes or why the government issues taxes.
A “tax can be defined as a payment to support the cost of government” (Jones, 2014). Taxes are implemented by our government to raise revenues for specific purposes. Our government implements local, state, and federal taxes. Each jurisdiction is subjected to the authority of the government above them.
Local governments establish their own tax rate but are subjected to the authority of their states governments. Local governments include townships, cities, counties, municipalities, and school districts. Local governments rely on ad valorem taxes. Ad valorem taxes are real property taxes (“land and whatever is erected or growing on the land or permanently affixed to it” (Jones, 2014).) and personal property taxes (homes and buildings). A tax assessor will evaluate property yearly to determine the market value.
State governments rely on sales tax and income tax for revenues. Each state establishes their own tax rates but are subjected to the authority of the federal government. Sales tax is a tax percentage on the retail price of tangible property. Sales taxes are implemented on consumer goods and/or consumer services. The seller of the goods or services must collect the taxes and submit them to the state government. Some states have a complementary use tax. Use tax is implemented if the owner of the goods did not pay taxes when they purchased the goods. Excise tax is implemented on retail sales of goods. Gas, alcohol, and cigarettes are examples of excise tax on consumer goods. Hotel accommodations and car rentals are examples of excise tax on consumer services. Personal income taxes are a
References: Jones, Sally, and Shelley Rhoades-Catanach (2014). Principles of taxation for business and investment planning, 2015 edition, 18th edition. [VitalSource Bookshelf version]. Retrieved from http://devry.vitalsource.com/books/1259544486/epubcfi/6/24