How to Calculate Sales Tax Manually

Sales tax adds a few cents per dollar.

Sales taxes are levied by state and local governments and make up about a quarter of their revenues, says Money-Zine.com. Most cash registers are equipped to calculate sales tax automatically, but if you want to know the sales tax on an item before making a purchase, you may have to calculate it manually. To calculate sales tax, you need to know the cost of your item and the tax rate for the state and locality in which you are making your purchase.

Instructions

1. Calculate sales tax by using the following equation: Sales Tax = Price x Tax Rate / 100.

2. Calculate the total sales tax rate by adding the state sales tax to the local sales tax. For example, if your state sales tax is 4.5 percent and your county imposes a local sales tax of 1 percent, the total sales tax rate is 5.5 percent.

3. Divide the total sales tax by 100 to convert it to a decimal. In this example, you divide 5.5 by 100 to get 0.055.

4. Calculate the sales tax by multiplying the decimal rate from step 3 by the amount of your purchase. Finishing the example, if you are buying $100 of goods subject to a 0.055 sales tax, you will pay $5.50 in sales tax.

Tips & Warnings

• You can look up your state sales tax rate by using the table provided by the Tax Foundation (see Resources). Contact your local Department of Revenue to determine if you need to include an additional local sales tax.

References

• College Cram: Calculating Sales Tax
• Basic Mathematics: How to Calculate Sales Tax
• Money Zine: Property Taxes Explained

Resources

• Tax Foundation: State Sales Tax Rates