Sales tax calculator
Rates vary by state, county and city, and combined rates in the same state can differ by several points. Some goods are exempt or taxed at a reduced rate. Check the rate for the exact address of the sale.
Sales tax is the price multiplied by the rate. A $100 item at 7% costs $107. Working backwards, divide the total by 1.07 rather than subtracting 7%, which would give $99.51 and be wrong.
How to calculate sales tax
Combined rates are what actually apply, and they are rarely the state rate alone. Texas is the clearest illustration: the state charges 6.25%, and cities, counties, transit authorities and special purpose districts may each add on top, up to a combined maximum of 8.25%. Which of them reach a given shop depends on the address, not the town, which is why the Comptroller publishes a lookup by address rather than a rate per city. Sourcing rules add another layer. Under the Streamlined Sales and Use Tax Agreement, a sale the buyer does not collect at the seller’s counter is sourced to the place where the buyer takes delivery, so an online seller is applying the buyer’s rate rather than its own — which is why every member state has to publish a machine-readable boundary file mapping locations to tax codes — by five- or nine-digit ZIP in most of them, and by the actual address in some — alongside a rate file giving the rate each code carries, and why a national seller deals in thousands of rate combinations rather than fifty.
What people use it for
- Checking a receipt total
- Pricing an item before tax is added at the register
- Working out the pre-tax cost for an expense claim
- Comparing prices between states
- Recovering the net amount from a gross figure for bookkeeping
Questions
Multiply the price by the rate as a decimal. A $50 item at 8.25% adds $4.13, for $54.13.
Divide by one plus the rate. A $107 total at 7% was $100 before tax. Subtracting 7% of the total instead gives $99.51 and is wrong by 49 cents.
Because the tax was charged on the smaller number. Seven per cent of $100 is $7, but seven per cent of $107 is $7.49, so taking that away removes more than was ever added.
The combined state, county and city rate for the address where the sale takes place, not the headline state rate.
Two percentage points in Texas, where the state levies 6.25% and local jurisdictions may add up to 2% for a combined maximum of 8.25%. Which of them reach a given shop depends on the address rather than the town.
Generally the buyer’s. Under the Streamlined Sales and Use Tax Agreement a sale the buyer does not collect at the seller’s counter is sourced to the place of delivery, so member states publish machine-readable rate and boundary files and a national seller deals in thousands of rate combinations rather than fifty.
No. Sales tax is charged once at retail and added at the register; VAT applies at every stage and is included in shelf prices.
No. Many states exempt groceries, prescription medicines and clothing, or tax them at a reduced rate. The rate field cannot know which category an item falls into.
Because rounding happens somewhere, and where it happens changes the answer. Three $12.99 items at 8.25% are $1.07 of tax each when the tax is rounded per line, so $3.21, but $3.22 when the same 8.25% is applied to the $38.97 subtotal and rounded once. This calculator does the second: it rounds the tax to whole cents on the amount you enter.
To the cent, yes. The two directions are not exact inverses in the arithmetic, because adding settles the tax into whole cents and removing divides without rounding, but the drift never reaches half a cent and the displayed price always comes back unchanged.