Sales Tax Calculator
The Sales Tax Calculator helps you determine the sales tax on a purchase and the total price including tax. Enter the original price and the sales tax rate to get your calculation.
What is Sales Tax?
Sales tax is a consumption tax imposed by the government on the sale of goods and services. It is usually calculated as a percentage of the purchase price and collected by the seller at the point of sale. Sales tax rates vary by state, county, and city.
How the Sales Tax Calculator Works
The Sales Tax Calculator uses the following formulas:
Step 1: Calculate the Sales Tax Amount
Step 2: Calculate the Total Price
Understanding Sales Tax
Why is Sales Tax Charged?
Governments use sales tax revenue to fund public services such as schools, roads, public safety, and healthcare.
Sales Tax Exemptions
Some goods and services may be exempt from sales tax, or taxed at a lower rate. Common exemptions include groceries, prescription drugs, and certain types of clothing. These exemptions vary by jurisdiction.
Use Tax
In some cases, if you purchase an item from an out-of-state seller who does not collect sales tax, you may be required to pay a "use tax" to your state government. This is typically the same rate as the sales tax.
Tips for Using the Sales Tax Calculator
Enter Accurate Information
Ensure you enter the correct original price of the item and the applicable sales tax rate for your location to get an accurate calculation.
Check Local Rates
Sales tax rates can vary significantly. If you are unsure of the rate, you may need to look it up for your specific city, county, and state.
Frequently Asked Questions
How do I find the sales tax rate for my area?
You can usually find sales tax rates on your state or local government's department of revenue website. Online search engines can also help you find this information.
Is sales tax charged on online purchases?
Due to changes in laws (e.g., the South Dakota v. Wayfair Supreme Court decision), most online retailers now collect sales tax based on the buyer's shipping address, even if the retailer does not have a physical presence in the buyer's state.
What's the difference between sales tax and VAT?
Sales tax is typically collected at the final point of sale to the consumer. Value Added Tax (VAT), common in many countries outside the U.S., is collected at each stage of production and distribution. The end consumer ultimately bears the VAT, but it's collected differently.