How to Prepare Sales Tax

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There are many aspects to running a business. One aspect is knowing how to prepare sales tax. Preparing sales tax is necessary when selling products directly to customers. It's a legal requirement, and therefore all business owners should know how to find out the sales tax rate in their state, as well as how to calculate how much sales tax needs to be added to each item sold to customers. Otherwise, you could find yourself in legal and financial trouble.

Find out the sales tax rate in your state. All states have different rates. You can either call your state's Department of Commerce or you can check websites like Zip2Tax.com, which allows you to enter your zip code and find out your state tax rate.

Multiply the decimal for the sales tax rate for your state by the cost of the item that you need to prepare the sales tax for. The answer you get is the amount of sales tax you need to charge. For example, in North Carolina, the sales tax rate is 7.75%, so the decimal is 0.0775. For an item that costs \$5.50, you would multiply 0.0775 by 5.50 to get 0.43.

Add the amount of sales tax to the original cost of the item. In the example above, you would add \$0.43 to \$5.50 to get \$5.93. This is the total cost of the item after sales tax.

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