Answer:
An ad-valorem tax is type of the tax applied the value of an underlying asset and this type of tax is imposed at the time of transaction.
There are following two situations:
a. CC is in different state than JC. If CC and JC are in different state, then Grays shops from JC in order to save sales tax. It is possible that in JC, sales tax rate is lower in comparison to CC. Therefore, JC must be in state which imposes lower sales tax.
b. CC and JC are in same state: if CC and JC are in same state the, surely CC imposes higher sale tax than JC because Gray used to shop from JC only.
