How Do You Add Taxes to a Total Price

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It's really important to know how much an item is going to cost before you purchase it. It's not as easy as just looking at the price tag; sales tax must be calculated in order to determine the total cost. Sales tax rates are increasing, which makes the tax impact on a purchase more significant. Use these tips to learn how to calculate sales tax on your retail purchases.

1. 1

   Multiply the cost of an item or service by the sales tax in order to find out the total cost. The equation looks like this: Item or service cost x sales tax (in decimal form) = total sales tax. Add the total sales tax to the Item or service cost to get your total cost.^[1]

   Calculating Sales Tax
   Change the sales tax into decimal form. For instance:

   7.5% sales tax becomes .075 in decimal form
   3.4% sales tax becomes .034 in decimal form
   5% sales tax becomes .05 in decimal form

   Formula: Item or service cost x sales tax (in decimal form) = total sales tax.
   Sample calculation: $60 (item cost) x .075 (sales tax) = $4.50 total sales tax

2. 2

   Once you've calculated sales tax, make sure to add it to the original cost to get the total cost. If the total sales tax is $5 and your original item cost was $100, your total cost will be $105.^[2]

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1. 1

   Try this example. You're buying a basketball in the state of Colorado, where sales tax is 2.9%.^[3] The basketball costs $25. How much is the total cost of the basketball, including sales tax?

   Solution
   Convert the percentage sales tax into decimal form: 2.9% becomes .029.
   Multiply it out: $25 x .029 = $.73, or $25.73 total cost

2. 2

   Try another example. You're buying groceries in the state of Mississippi, where the sales tax is 7%. The grocery bill costs $300. How much is the total cost of the grocery bill, including sales tax?

   Solution
   Convert the percentage sales tax into decimal form: 7% becomes .07.
   Multiply it out: $300 x .07 = $21, or $321 total cost

3. 3

   Try a third example. You're buying a car in the state of Massachusetts, where sales tax is 6.25%.^[4] The car costs $15,000. How much is the total cost of the car, including sales tax?

   Solution
   Convert the percentage sales tax into decimal form: 6.25% becomes .0625.
   Multiply it out: $15,000 x .0625 = $937.5, or $15,937.5 total cost

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1. 1

   "De-calculate" by working backward if you know the original cost of the item. ^[5] You can work backwards to figure out the sales tax rate

   as long as you know how much the item initially cost.

   Example
   Let's say you bought a computer, listed at $1,200, and the total bill came out to $1,266, meaning that the sales tax was $66. What is the sales tax rate?
   Take the tax rate and divide it by the original price: $66 ÷ $1,200 = .055
   Convert the decimal into a percentage by moving the decimal point two places to the right: .055 becomes 5.5%
   Your original sales tax rate is 5.5%

1. 1

   Know that some American states do not have sales tax. These states currently include:^[6]

   • Delaware
   • New Hampshire
   • Montana
   • Oregon
   • Alaska

2. 2

   Know that states levy different taxes for different goods. A state or district, such as District of Columbia, may have a general sales tax of 6%, but set the tax rate on liquor and prepared food at 10%.^[7]

   • New Hampshire, for example, has no general sales tax but still taxes restaurants, food services, hotels, room rentals, and motor vehicle rentals at 9%.^[8]
   • Massachusetts, for example, only starts counting sales tax associated with clothing when the bill exceeds $175. So if you buy under $175 worth of clothing in Massachusetts, the state government won't tax it.^[9]

3. 3

   Be sure to check with your local state and city when calculating sales tax. We don't often talk of "city sales tax," but it's there.^[10] Most people, however, just lump it in with state sales tax. If you want to know exactly how much money you'll pay in taxes for a certain item,

   check your local state and city tax laws

   for more information

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Add New Question

• Question

  How do I add 6% sales tax to an amount?

  

  Multiply the amount x 1.06. This will give you the total amount, including the tax. The "1" is 100% of the item cost, and the ".06" is the tax rate of 6%. For example, you buy a screw driver set for $10.00 and the sales tax rate is 6%. $10.00 x 1.06 = $10.60. This is your total, including tax.

• Question

  Can 6% be written as 0.0600?

  

  6% would be 0.06, all you do is move the decimal two spaces to the left. For example 6% sales tax on an item would be calculated by multiplying the total cost by the decimal form of the percentage. Say the total cost was $30.00, it would be calculated as 30 x 0.06 = 1.8 then add the quotient to the original cost.

• Question

  If I sell three trees at $85.00 per tree and tell the buyer I included the 6% sales tax in the total price, and $85.00 per tree equals $255.00, when I make out my sales tax form, what do I say the amount of tax was and what was the sale amount?

  

  To calculate the sales tax that is included in receipts from items subject to sales tax, divide the receipts by 1 + the sales tax rate. For example, if the sales tax rate is 6%, divide the total amount of receipts by 1.06. $255 divided by 1.06 (6% sales tax) = 240.57 (rounded up 14.43 = tax amount to report.

• Question

  How much is $1070.50 + 6% tax?

  

  Will Thompson

  Community Answer

  The answer is $1134.73. Multiply by 1+ tax rate. So, $1070.50 X 1.06 = $1134.73.

• Question

  How can I convert percentages to decimals?

  

  You take the percentage, divide it by 100 (because percentages are out of 100) and that is the decimal equivalent of that percentage.

• Question

  How do I add 9 percent to 189?

  

  Calculate 1 percent (in this case, 1.89), multiply that by 9, and add it to 189.

• Question

  If I have an item to be sold for $46,000 including tax and the tax rate is 7.38%, how do I find the base price for the item?

  

  Apprenticexyz

  Community Answer

  To find the cost or base price of an item use the total and divide it by the tax rate: $46,000 / 1.0738 = $42,838.52. That is the base price. Now to get the total tax rate you can use $46,000 - $42,838.52 = $3,161.48. So you have total including tax = cost plus total tax. $46,000 = 42,838.52 + 3,161.48. The only tricky part is the tax rate has to be converted to divide to it; you take 7.38 x 100 = 0.0738 and you add 1, so it's 1.0738.

• Question

  How can I find the original cost with only the sales tax total and rate? For example: tax rate is 8.6% and collected tax is $15.55.

  

  Divide the total tax by the tax rate. In your case, $15.55 / 8.6% = $180.81. The original cost is $180.81, and the total cost with tax included is $180.81 + $15.55 = $196.36.

• Question

  How does sales tax impact my paycheck?

  

  It should not impact your paycheck at all.

• Question

  How do I know what the sales tax is from a total?

  

  Apprenticexyz

  Community Answer

  Unless the tax rate is explicit you would need to know the cost to get the total sales tax. You can't find it from 1 value alone.

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Video

• When calculating sales tax, round up to the next penny^[11] if you get an amount that has too many decimal places. If your purchase price is $35.50 and your sales tax rate is 7.4 percent, the total when you multiply them is $2.627. Round that up to $2.63 for your amount of sales tax.

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Article SummaryX

To calculate sales tax, first convert the sales tax from a percentage to a decimal by moving the decimal 2 places to the left. Then multiply the cost of the item or service by that decimal to get the sales tax. Remember to add the sales tax to the cost of the item or service to get the total amount you will pay for it. For more information on how to calculate sales tax, including some examples, scroll down!

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How Do You Add Taxes to a Total Price

Source: https://www.wikihow.com/Calculate-Sales-Tax#:~:text=Multiply%20the%20cost%20of%20an,to%20get%20your%20total%20cost.

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