What type of tax is collected based on the sale of services and merchandise?

Sales tax is a type of tax specifically applied to the sale of goods and services at the point of purchase. When consumers buy merchandise or pay for services, a percentage of the transaction's total is added by the seller and collected by the government. This tax is generally a pass-through for the consumer, meaning businesses are responsible for collecting it but do not profit from it; they remit the collected tax to the state or local government.

In contrast, income tax is based on what individuals or businesses earn. Property tax pertains to the ownership of real estate and is assessed on the value of property owned. Excise tax is a specific tax imposed on particular goods, such as fuel or alcohol, often included in the price of the product rather than added at the point of sale.

In summary, the correct answer identifies the type of tax directly connected to consumer purchases of goods and services, distinguishing it from other tax types that are based on income, property ownership, or specific goods.