What is a Sales Tax Calculator?
The sales tax calculator is a financial tool used to compute the product price including or excluding sales tax. It's helpful for individuals, businesses, and retailers to quickly calculate the final cost of a product.
What is Sales Tax?
It's a consumption tax that is imposed by the U.S. government on the sale of goods and services. This tax is collected by vendors from the consumers when they make purchases. Then vendors remit it to the government.
The primary purpose of this tax is to generate revenue for the government. Then it is used for public services and infrastructure such as schools, healthcare, roads, and many more.
How to Calculate Sales Tax?
Let's take an example to calculate the after-tax price.
Example:
The price before tax is $45.99 and sales tax is 7.5%. Calculate the sales tax amount and after-tax price.
Solution:
Step 1: Convert the sales tax into decimal form.
Tax rate = 7.5 / 100 = 0.075.
Step 2: Now multiply the before-tax price by the tax rate to get the sales tax amount.
Sale tax amount = $45.99 × 0.075 = $3.45.
Step 3: Add the sales tax amount with a before-tax price to get the final price.
Final price = $45.99 + $3.45 = $49.44.
Let's take an example to calculate the before-tax price based on the after-tax price and sales tax.
Example:
The price after tax is $230.17 and sales tax is 6.7%. Calculate the before-tax price.
Solution:
Step 1: Convert the sales tax into decimal form.
Tax rate = 6.7 / 100 = 0.067.
Step 2: Add 1 to the sales tax rate.
Sales tax rate = 1 + 0.067 = 1.067.
Step 3: Now divide the after-tax price by the sales tax rate to get the before-tax price.
Price before tax = $230.17 / 1.067 = $215.72.
Sales tax amount = $230.17 - $215.72 = $14.45.
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