Sales Tax Calculator
Use your state's sales tax rate to calculate the sales tax and total price. To calculate sales tax and total price, enter item price and percentage.
What is sales tax?
Sales tax is a tax that is charged on the sale or use of services and goods. All states in the US and District of Columbia, except Alaska, Delaware and Montana, New Hampshire, and Oregon, levy a sales tax on items and services purchased. Alaska allows localities to collect local sales taxes, just like many other states.
Certain items are exempt from sales tax in some states. Massachusetts is an example of a state that does not charge sales tax on regular grocery items. Many states also have additional tax surcharges. It is not uncommon for hotels and restaurants to charge a higher tax rate than the state's sales tax rate in the hospitality sector. For information about tax surcharges and sales tax rates, check with your locality and state.
U.S. Sales Tax
The federal sales tax in the United States is not applicable. All states, except the District of Columbia, Puerto Rico, and Guam, do not have a statewide sales tax. These include Alaska, Delaware and Montana, New Hampshire, and Oregon. There are different sales tax rates in each state. Local or municipal sales taxes may also be imposed. Contrary to VAT, which is not imposed in the U.S., sales tax only applies to retail purchases. Most transactions between businesses and goods or services are exempt from sales tax.
The sales tax rate can vary from 0% to 16% depending upon the state and type of product or service. Each state has its own sales tax enforcement policies. Texas exempts prescription medicine and food seeds from taxation. Vermont charges a general sales tax of 6%. However, alcoholic beverages that are consumed immediately will attract an additional 10% tax. These are just a few examples of the differences in taxation between jurisdictions. Sales tax regulations and rules vary from one state to the next.
The average sales tax impact on Americans is around 2 percent of their personal annual income. Nearly one-third of all state revenue comes from sales tax, and it is second only behind the income tax as a revenue source. The state's dependence on sales tax is different. The importance of sales taxes is greater in the west and south than in New England or the industrial Midwest. Florida, Texas, Tennessee, and Washington all receive more than 50% of their tax revenues from sales taxes. Some states also get close to 60% of their tax revenues from sales taxes. New York, however, raises only around 20 percent of its revenue from the sales tax.
How to Calculate Sales tax
Multiply your item's price by the tax rate. Divide the tax rate in percent by 100 to convert it into a decimal. This number can then be used in multiplication.
- Get the list price and the tax percentage
- Divide the tax percentage by 100 for a decimal tax rate
- Multiply the list price with a decimal tax rate to obtain the tax amount
- To get the total price, add the tax to the list price
Let's say, for example, that you are buying a coffee maker for the kitchen. The coffee maker's price is $70, and 6.5% state sales tax.
- The list price is $90, and the tax percentage is 6.5%
- Divide the tax percentage by 100: 6.5/100 = 0.065
- Multiply price by decimal rate of tax: 70 * 0.0.065 = 4.55
A $70 item will result in a $4.55 tax
- To get the total price, add tax: 70 + 4.55 = $74.55.
Sales Tax Calculation Formulas
- Sales tax rate = sales tax percent / 100
- Sales tax = list price * sales tax rate
- Total price including tax = List price + Sales tax
- Total price inclusive of tax = list price + (list Price * Sales Tax Rate),
- Total price, including tax = list price * (1 + sales tax rate).
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