Sales Tax Calculator

🔑 Key Sales Tax Concepts

• Sales Tax Formula: Tax Amount = Price × (Tax Rate ÷ 100). Final Price = Price + Tax Amount.
• State vs Local: Most states have a base rate, and local jurisdictions can add more (up to 7%+ in some areas).
• Tax-Exempt States: Five states have no state sales tax: Alaska, Delaware, Montana, New Hampshire, Oregon.
• Tax-Inclusive Pricing: Some prices include tax. To find pre-tax price: Pre-tax = Total ÷ (1 + Tax Rate ÷ 100).
• Use Tax: Tax on out-of-state purchases if sales tax wasn\'t collected by the seller.

Example: Calculate sales tax for $500 purchase with 7.25% tax

Step 1: Price Before Tax = $500

Step 2: Tax Rate = 7.25%

Step 3: Tax Amount = $500 × (7.25 ÷ 100) = $500 × 0.0725 = $36.25

Step 4: Final Price = $500 + $36.25 = $536.25

Alternatively: Final Price = $500 × (1 + 0.0725) = $500 × 1.0725 = $536.25

⚠️ Note: Local taxes can significantly increase rates. Combined rates can reach 11-13% in some areas. Always check your specific location\'s combined rate.

• Always budget for tax: Add 5-10% to purchase prices when budgeting (depending on your state).
• Tax-free holidays: Many states offer 2-3 day tax-free periods for clothing, school supplies, or energy-efficient items.
• Online purchases: Most online retailers now collect sales tax based on your shipping address.
• Use tax: If sales tax wasn\'t collected on online purchases, you may owe use tax to your home state.
• Tax deductions: You can deduct state sales tax OR income tax (not both) on federal returns if you itemize.
• Exempt items: Groceries, prescription drugs, and sometimes clothing are exempt in many states.