How to Calculate Sales Tax
When you are purchasing an item, you must pay sales tax in addition to the item's retail price. Each state and sometimes city has its own individual tax rate, so the amount of sales tax you will be required to pay varies greatly. However, it is not hard to calculate the sales tax that you will have to pay on your next purchase.
- Obtain a calculator. Since you are working with percentiles, it is handy to use a calculator to calculate sales tax.
- Determine the tax rates for your jurisdiction. The Federal Tax Administration maintains a database of all of the sales tax rates for each state and city. You can obtain this information by visiting their website.
- Obtain the retail price of the item you are going to purchase. Sales tax is a percentage, so you will pay a percentage of each dollar of an item's retail price. If you are purchasing more than one item, simply add together all of their retail prices and obtain a total retail price.
- Calculate your county's sales tax. Multiply the retail price of your item or items by the county's tax percentage. If your county's sales tax rate is 7%, for example, you will multiply the retail price by .07. If the item you wish to purchase has a retail price of $19.99, you would multiply $19.99 by .07, and obtain a sales amount of $1.39. You will then add this amount to the retail price for a total out-of-pocket cost of $21.38.
- Calculate your city's sales tax. If your city requires its own sales tax to be paid, follow the same process outlined above and add your city's sales tax to your total for your updated total cost.