Sales Tax Calculator

What is Sales Tax?

Sales tax is a consumption tax imposed by the government on the sale of goods and services. It is typically calculated as a percentage of the purchase price and is collected by the retailer at the point of sale. The tax rate can vary depending on the state, county, or city where the purchase is made.

The Sales Tax Formula

The general formula for calculating sales tax is:

\[Tax Amount = Purchase Amount \times Tax Rate\] \[Total Amount = Purchase Amount + Tax Amount\]

Where:

• Purchase Amount = The cost of the item before tax
• Tax Rate = The percentage of tax applied (expressed as a decimal)
• Tax Amount = The amount of tax to be paid
• Total Amount = The final cost including tax

Step-by-Step Tax Calculation

1. Determine the purchase amount and applicable tax rate.
2. Convert the tax rate to a decimal (divide by 100).
3. Calculate the tax amount: \[Tax Amount = Purchase Amount \times (Tax Rate \div 100)\]
4. Calculate the total amount: \[Total Amount = Purchase Amount + Tax Amount\]

Example Calculation

Let's calculate the sales tax for a purchase of $100 with a tax rate of 8.25%:

1. Purchase Amount = $100, Tax Rate = 8.25%
2. Convert tax rate to decimal: 8.25% = 0.0825
3. Calculate Tax Amount: \($100 \times 0.0825 = $8.25\)
4. Calculate Total Amount: \($100 + $8.25 = $108.25\)

Visual Representation

The blue portion of the bar represents the tax rate (8.25%) for the given purchase.