Question

59. Which statement about the ability of individual states to collect sales tax on Internet transactions is true? a. States cannot collect sales tax on Internet sales from merchants nor may a state require that its citizens report Internet purchases so that they may be taxed. b. A state cannot collect sales tax from merchants unless sales to the state's citizens amount to more than 1 million in the aggregate. c. A state can collect sales tax from a merchant only if the merchant has a store or distribution center in the state. d. Individual states may without restriction collect sales tax from merchants on items purchased through the Internet by in-state residents. e. Only with permission of Congress, granted on a state-by-state basis, may individual states collect from merchants sales tax on items purchased through the Internet by in-state residents.

Answer 1

Question 59

Right answer- C) A state can collect sales tax from a merchant only if the merchant has a store or distribution center in the state.

Explanation- sales refers to a specific amount of money that a merchant needs to pay to the state government in return of selling their products in that states. But when it comes to collecting sales tax on internet transactions the government can only collect if that merchant has any store or selling house in that state. So here we can say the right answer would be option C.