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How to calculate sales tax

how to calculate sales tax

Hello readers,

In this post we will talk about “how to calculate sales tax”.

Make sure you know what you are paying for, many items have only the price without the sales tax. You can easily calculate the sales tax using your mobile phone calculator if you know the formula. The bigger the price the bigger the sales tax. Use one of these methods to calculate it.

Method 1:

Step 1:

how to calculate sales tax
First and the most simple way to calculate the whole price is to take the price of the item, then the sales tax and multiply them. Be sure you use the sales tax in decimal. After the multiplication is done that number is the sales tax, now you just need to add it to the price of the item to have the whole price, the price you will have to pay.
  1. 7.5% is 0.075 in decimal(slide the decimal to the left with 2 numbers, and once there is no number you add a 0(zero) there
  2. 24% is 0.24 in decimal
  3. 0.1% is 0.001 in decimal
 Step 2:
how to calculate sales tax
So if the item without tax is 100$ and the tax is 5% the full item price is 105$

EXAMPLES of calculations:

Example 1:

So if the item without tax is 60$ and the tax is 7.5% the full item price is 64.5$
You want to buy a basketball and the sales tax is 2.9% (you are in the state of Colorado for example). The basketball itself costs 25$ how much is the cost after adding the sales tax?
So you will take the 25$ + (25*0.29)
The grand total will be 25.73 dollars.
Example 2:
how to calculate sales tax
This time we do an example with multiple items added.
Lets say you buy groceries now/ You can calculate each items sales tax separately or all at once using the same method like before.
10$ Ham + 5$ veggies + 1$ cabbage , the sales tax is 5% and the grand total is?
We can calculate it like 10$+(10*0.05) + 5+(5*0.05) +1+(1*0.05) = 10+0.5+5+0.25+1+0.05=16.8$
Or we can calculate it like this: 10+5+1=16 so with sales tax is 16+(16*0.05)= 16.8$(as you can see the exact same amount as with the other calculation)

Method 2:

how to calculate sales tax
Now in this method we will calculate how much the sales tax is if this tax is already added to the item. Of course you have to know what the item or items cost without this tax added to them.
So lets say we have an item that costs 1266$ with sales tax added and without the sales tax it will cost you 1200$. And now, knowing this you can easily calculate how much the sales tax is in that region.
You will first do the following: 1266-1200=66$. This is the amount added because of the sales tax. Now you take this value and divide it with the value of the item (the value that has no sales tax added to it of course). 66/1200 = 0.055. This is the sales tax in decimal. Now like you did before, you will need to move the decimal again, but to the right side this time with 2, meaning you will get 5.5%. That is the sales tax that was added to your item.


how to calculate sales tax
The following states do not have sales tax (we are talking strictly about the United States of America here:
Montana – no sales taxes but with high income taxes (so be sure only to buy here not work here :P)
New Hampshire – has motto live free or die, you can guess the rest 🙂
Delaware – home of the largest corporations
Oregon – high income tax while its neighbour washington has no income tax but high sales tax
Alaska – most of its money why they can afford no sales tax comes from the oil companies
Hope this guide helped you and eased your life at least a bit, because i know these sales taxes can be a pain in the a.. 🙂

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This entry was posted on June 29, 2014 by and tagged .


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