Sales Tax Calculator

About the Sales Tax Calculator

The Sales Tax Calculator helps you determine the total cost of your purchases after adding sales tax, or calculate the pre-tax amount from a tax-inclusive price. It's useful for budgeting purchases, estimating business expenses, or filing tax returns.

How to Use This Sales Tax Calculator

This calculator offers two calculation modes:

Calculate Final Price Mode

Use this mode to add sales tax to a pre-tax amount:

1. Pre-Tax Amount: Enter the price before tax is applied.
2. Sales Tax Rate: Enter the applicable sales tax rate as a percentage.
3. Common Tax Rates: Optionally select a common tax rate from the dropdown menu.
4. Click "Calculate" to see the final price including tax.

Calculate Pre-Tax Amount Mode

Use this mode to find the pre-tax amount from a tax-inclusive price:

1. Total Amount (Tax Included): Enter the final price that already includes sales tax.
2. Sales Tax Rate: Enter the applicable sales tax rate as a percentage.
3. Common Tax Rates: Optionally select a common tax rate from the dropdown menu.
4. Click "Calculate" to see the original pre-tax amount.

Multiple Items Feature

If you need to calculate tax on multiple items:

1. Toggle on "Include Multiple Items".
2. Add items with their names, prices, quantities, and tax-exempt status.
3. Click "Add Item" to include additional items.
4. Click "Calculate" to see a breakdown of all items, taxes, and the total.

Understanding Sales Tax

What is Sales Tax?

Sales tax is a consumption tax imposed by governments on the sale of goods and services. The tax is typically calculated as a percentage of the purchase price and collected by the retailer at the time of purchase.

How Sales Tax Varies

In the United States, sales tax rates vary significantly by state and even within states by county and city. Some states have no sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon), while others have rates that can exceed 9% when combined with local taxes.

What Items Are Taxable?

The items subject to sales tax also vary by location. Generally:

• Taxable Items: Most tangible personal property (physical goods), some services.
• Common Exemptions: Groceries (in many states), prescription medications, certain clothing items, and certain services.

Sales Tax Formulas

Calculating Final Price (Adding Tax)

To calculate the final price after tax:

Tax Amount = Pre-tax Price × (Tax Rate ÷ 100)

Final Price = Pre-tax Price + Tax Amount

Calculating Pre-Tax Amount (Extracting Tax)

To calculate the pre-tax amount from a tax-inclusive price:

Pre-tax Amount = Final Price ÷ (1 + (Tax Rate ÷ 100))

Tax Amount = Final Price - Pre-tax Amount

Sales Tax for Businesses

Collecting Sales Tax

If you're a business owner, you generally need to:

• Register for a sales tax permit in states where you have a physical presence or meet economic nexus thresholds.
• Collect the correct amount of sales tax from customers.
• File sales tax returns and remit the collected tax to the appropriate tax authorities.

Sales Tax Compliance

Sales tax compliance has become more complex for online sellers since the 2018 Supreme Court decision in South Dakota v. Wayfair, which allows states to require remote sellers to collect sales tax if they meet certain economic thresholds, even without a physical presence in the state.

Tax-Exempt Purchases

Who Qualifies for Tax Exemptions?

Certain entities and purchases may be exempt from sales tax:

• Nonprofit organizations with 501(c)(3) status
• Government agencies
• Educational institutions
• Purchases for resale by retailers

Using Exemption Certificates

Tax-exempt purchasers typically need to provide a valid exemption certificate to the seller at the time of purchase to avoid paying sales tax.

Sales Tax vs. Use Tax

Use tax is the counterpart to sales tax. If you purchase items from out-of-state sellers who don't collect sales tax, you're generally required to report and pay use tax to your state at the same rate as sales tax. This calculator can help determine the amount of use tax you might owe on such purchases.