The price tag says $100. At the till, it’s a bit more. How much more depends on where you live, what you buy and how the store applies its discounts.
This sales tax calculator handles the usual cases. It adds tax to a price, lets you include a quantity and a discount, and also works backwards from a total you already paid, so you can see what the item cost before tax.
How to use the Sales Tax Calculator#
- Choose what you want to find. Pick the total price with tax, or the price before tax.
- Enter the price details. For a total, enter the item price, the quantity and any discount. For the reverse, enter what you paid.
- Enter the sales tax rate. Use the combined state and local rate for the place of sale.
- Read the result. The tax, the discount and the final total are listed.
The formula#
Sales tax is a percentage of the price, added on top.
Here’s a typical purchase. You buy 2 items at $100 each with a 10 percent discount, and the tax rate is 7 percent.
- Subtotal: 2 × $100 = $200.00
- Discount at 10%: $20.00, which leaves $180.00
- Sales tax at 7% of $180.00: $12.60
- Total to pay: $192.60, or $96.30 per item
Working backwards from the total#
Say your receipt shows a total of $107 and you know the tax rate was 7 percent. The price before tax is $107 divided by 1.07, which is $100.00, and $7.00 of your payment was tax. Notice that you divide, you don’t take 7 percent off the total. It’s the same trap as in the VAT calculator.
Discounts, coupons and the order of things#
Most stores take the discount off first and charge tax on what’s left, which is how this calculator works. Some manufacturer coupons are handled differently, because the store gets reimbursed for them and the tax may apply to the full price. If the exact amount matters, read the coupon terms or ask the store.
If you sell online#
Since the US Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to collect sales tax once they pass a certain amount of sales or transactions there. The thresholds and rules vary from state to state, so if you run a shop, speak to an accountant. This tool is good for working out the tax on a single sale, not for deciding what you owe as a business.
A worked example, forwards and backwards#
A pair of shoes costs $120 before tax, with a sales tax of 8.25 percent. The tax is $9.90 and the total is $129.90. With a 20 percent discount first, the price falls to $96, the tax is $7.92 and the total is $103.92. Going backwards, you paid $108.25 in total in the same place. The price before tax was 108.25 ÷ 1.0825 = $100, and $8.25 of it was tax.
Why the rate is not one number#
In the United States, sales tax is set by states, counties and cities, so the rate depends on where you buy, and the rate printed on your receipt is the combined total. Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax, though Alaska allows local taxes. Combined rates in some cities exceed 10 percent. What’s taxed differs too: groceries, clothing and medicine are taxed in some places and not in others. Since a 2018 Supreme Court decision, online sellers can be required to collect tax in states where they have many customers, even without a shop there. There’s no safe default, so use the rate shown on your receipt or the state’s tax website, and enter it in the box.
Frequently asked questions#
Multiply the price by the tax rate as a decimal. For a $100 item at 7 percent, 100 × 0.07 = $7.00 of tax, so the total is $107.00.
Divide the total you paid by 1 plus the tax rate. For $107 at 7 percent, divide by 1.07 to get $100.
Usually after, so you pay tax on the lower price. Some manufacturer coupons are the exception.
Sales tax is added once, at the final sale. VAT is collected at each stage of production and sale, with businesses reclaiming what they pay along the way.
Alaska, Delaware, Montana, New Hampshire and Oregon don’t have a statewide sales tax. Alaska allows local sales taxes.