Calculating Sales Tax
How do I figure out sales tax? The method is a simple mathematical statement. Here’s how it’s done. Find out the percentage (asking a sales clerk should get you the information). Change the percentage to a decimal number. In the example below 8% is expressed as .08; sales tax always has two places after the decimal point.
Let’s set the sale price at $9.95 and the sales tax at 8%. You change the percentage into a decimal number, so 8 percent becomes .08. Multiply the sales price by the sales tax to determine the amount of tax for that purchase.
$9.95 x .08 = .796 (round the amount up to .80)
So the tax is 80 cents. Add that amount to the purchase price to determine the total cost. This makes the total purchase $10.75 ($9.95 + $.80 = $10.75)
This calculation works for any tax rate in any state. If sales tax increases, plug in the new numbers to get the relevant answer. If your city charges additional tax, calculate that tax separately from the state sales tax and then add the two numbers to the sales price. Here’s an example.
$9.95 x .08 = .796 (state tax) $9.95 x .01 = .099 (city sales tax)
You then add .80 cents for the state and .10 cents for the city to the original purchase price.
$9.95 + .80 + .10 = $10.85
Always add the state sales tax first because this applies to all states. The city tax only applies to cities that collect it.