Sales Tax Calculator.

Guide

How to use the Sales Tax Calculator

This calculator solves sales tax in whichever direction you need: add tax to a sticker price, strip tax out of a receipt total, or find the rate you were actually charged. Start by telling it which numbers you already have.

1. Under the What do you know? heading, pick Add tax to a price if you have a sticker price and want the total, Back tax out of a total if you have a receipt total and want the pre-tax price, or Find the rate if you have both and want the rate.
2. Fill in the Price before tax field, the Total with tax field, or both, depending on what you chose.
3. In the first two modes, choose your State in the dropdown. The calculator fills the Sales tax rate field with that state's base rate. Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon, although Alaska allows cities and boroughs to charge their own.
4. Adjust the Sales tax rate field if your city or county adds to the state rate, which is common. Enter it as a percentage, so 7.25 rather than 0.0725.
5. Read the result: the tax and total, the price before tax, or the effective rate, depending on your mode.

How the math works

Sales tax is a percentage of the pre-tax price, added on top. Multiply the price by the rate to get the tax, then add it to the price. A shortcut does both at once: multiply the price by one plus the rate written as a decimal. At 7.25 percent that multiplier is 1.0725.

Backing tax out of a total is where people slip. The total already includes the tax, so the tax is a percentage of a smaller number than the total. You cannot multiply the total by the rate. Instead, divide the total by that same multiplier to recover the pre-tax price; the difference is the tax.

Finding the rate works in reverse. Divide the total by the pre-tax price, subtract one, and you have the rate as a decimal.

Worked example

Say you are buying a $1,200 item where the combined rate is 7.25 percent.

Adding tax. Convert the rate: 7.25 ÷ 100 = 0.0725. Tax = $1,200 × 0.0725 = $87.00. Total = $1,200 + $87.00 = $1,287.00. The shortcut agrees: $1,200 × 1.0725 = $1,287.00.

Backing tax out. You have a $1,287.00 receipt and know the rate was 7.25 percent. Price before tax = $1,287.00 ÷ 1.0725 = $1,200.00. The tax portion is $1,287.00 − $1,200.00 = $87.00.

Finding the rate. An item marked $1,200 rang up at $1,287. Rate = $1,287 ÷ $1,200 − 1 = 0.0725, which is 7.25 percent.

Mode	You enter	Calculator returns
Add tax to a price	$1,200.00 at 7.25%	Tax $87.00, total $1,287.00
Back tax out of a total	$1,287.00 at 7.25%	Price before tax $1,200.00, tax $87.00
Find the rate	$1,200.00 and $1,287.00	Effective rate 7.25%

Now see what the wrong method does. Back tax out of the $1,287.00 receipt by multiplying the total by 7.25 percent and you get $93.31 of "tax" and a pre-tax price of $1,193.69, which is $6.31 too low. On one purchase that is a rounding error. On a year of expense reports it adds up.

Why your rate is probably higher than the state rate

The State dropdown gives you the statewide base rate, and in many places that is only the starting point. Counties, cities, transit districts and special taxing districts frequently stack their own percentages on top. Two stores a few miles apart can charge different combined rates because one sits inside a city limit and the other does not.

That is why the Sales tax rate field stays editable after you choose a state. If you know your local combined rate, type it in. If not, run any recent receipt from that area through the Find the rate mode; the effective rate it returns is your real local rate.

What gets taxed also varies. Many states exempt certain categories, such as groceries, prescription drugs or clothing, or tax them at a lower rate, so a receipt mixing taxable and exempt items shows an effective rate below the posted rate. That means part of the purchase was not taxed, not that the store erred.

Common mistakes

• Multiplying the total by the rate to find the tax. The tax was charged on the pre-tax price, not the total. Divide by 1 + r instead.
• Entering the rate as a decimal. The Sales tax rate field wants 7.25, not 0.0725. The decimal gives you a tax of a few cents and a total that looks almost right, the dangerous kind of wrong.
• Using the state rate when a local rate applies. If your combined rate is 8.75 percent and you compute at 7.25, you will be $18 short on a $1,200 purchase.
• Confusing sales tax with other add-ons. Shipping, environmental fees, bottle deposits and tips are not sales tax. Separate them out first.

How to read the result

In Add tax to a price mode, the total is what to expect at the register if the whole purchase is taxable at the rate you entered. In Back tax out of a total mode, the price before tax is the number for expense reports and for comparing a taxed receipt to an untaxed online price. In Find the rate mode, the effective rate is what you actually paid, the fastest way to learn a location's combined rate or to spot an item taxed in error.

If you are pricing a vehicle, trade-in credits can change the taxable amount; the Auto Loan Calculator handles that. For a restaurant check, the Tip Calculator works out the tip and the split. For a plain percentage of something, the Percentage Calculator is quicker.

What this calculator doesn't do

It applies a single flat rate to a single amount. It does not know which items in your cart are exempt, whether a tax holiday is in effect, or how use tax works on out-of-state purchases. The state base rates in the dropdown may lag behind rate changes.

Results are estimates. The tax authority's rules, and the amount printed on your actual receipt or invoice, govern what you owe.

Frequently asked questions

Estimates for planning only. Your lender, dealer or tax authority sets the real numbers, and rates, fees and rules change. This is not financial, tax or legal advice. Nothing you type here leaves your browser. See the terms of use.