Article — Sales Tax Calculator
Sales tax calculator: figure tax, total, and pre-tax price
A sales tax calculator multiplies a pre-tax price by the tax rate to give tax and total, or divides a tax-included total by (1 + rate) to back out the pre-tax price. For a $100 item at 7%, the tax is $7 and the total is $107. To reverse $107 at 7%, divide by 1.07 to get $100.
Forty-five U.S. states plus Washington, D.C. levy a statewide sales tax. Five states have none: Delaware, Montana, New Hampshire, Oregon, and Alaska. In nearly every taxing state, counties and cities can add local rates on top, which is why the combined rate on a receipt usually differs from the state rate. This calculator works at any percentage you enter, so you can match the exact rate printed on a receipt or quoted by a seller.
What is sales tax?
Sales tax is a consumption tax applied to retail sales of goods and certain services. The seller collects it at the point of sale and remits it to state and local tax authorities. The buyer pays it on top of the listed price, which is why U.S. shelf prices look lower than European prices for similar items.
Mississippi adopted the first modern U.S. sales tax in 1930 during the Great Depression. By 1969, every state except the current five exemption states had one. Today sales and gross receipts taxes account for roughly 30% of state tax collections nationwide, according to U.S. Census state and local government finance data.
The U.S. is the only large developed country without a national consumption tax. Sales tax is set state by state, and there are more than 11,000 distinct combined rates across counties and special districts in the country.
The sales tax formula
The math is straightforward. Multiply the pre-tax price by the rate as a decimal, then add it back to the price. A $250 purchase at a 6.25% rate produces $250 × 0.0625 = $15.63 in tax and a total of $265.63.
Tax = Price × Rate / 100Total = Price + TaxPre-tax = Total / (1 + Rate / 100)If your state charges 4% and your county adds 2.5%, the combined rate is 6.5%. Always apply combined rates to the full pre-tax price; do not chain them.
Reverse sales tax: backing out the pre-tax price
Reverse calculation gets the pre-tax price from a tax-included total. Bookkeepers use it to record net sales separately from collected tax. Switch the calculator to Reverse from total mode and enter the receipt total.
For a $214 receipt at a combined 7% rate, $214 / 1.07 = $200 pre-tax. The tax collected was $14. The same formula handles VAT-inclusive prices in Europe and GST-inclusive prices in Canada and Australia, simply by entering the local rate.
U.S. state sales tax rates
State-only sales tax rates range from 2.9% in Colorado to 7.25% in California. The five no-tax states make up for the missing revenue with higher income, property, or excise taxes. New Hampshire, for example, has no general sales tax but levies a meals and rooms tax of 8.5%.
- Highest state-only rate California, 7.25%
- Lowest non-zero state rate Colorado, 2.9%
- No sales tax Delaware, Montana, New Hampshire, Oregon, Alaska
- Highest combined average Tennessee at roughly 9.55%
- Cities above 10% combined exist in Alabama, Louisiana, Oklahoma, and Tennessee
- U.S. average combined rate 7% to 8% in most metro areas
Combined state and local sales tax
Local sales tax is layered on the state rate. Los Angeles County's 2.25% local rate, added to California's 7.25%, produces a 9.5% combined rate at most retail stores in the county. Some districts add another quarter or half percent for transit or stadium financing.
Sales tax vs. VAT
Sales tax in the U.S. is exclusive: the listed price is pre-tax and the buyer pays the tax on top. Value-added tax in most of the world is inclusive: the listed price already contains VAT. The reverse formula in this calculator works for both because the math is identical — only the convention for displaying price differs.
If you are shopping with a strict budget cap, divide the cap by (1 + your local rate). At 8% tax, a $100 cap means you can spend $92.59 pre-tax. Anything over that puts the receipt above $100.
Online sales tax after Wayfair
Before 2018, online sellers without a physical store in a state generally did not have to collect that state's sales tax. The Supreme Court's decision in South Dakota v. Wayfair changed that. States can now require remote sellers to collect tax once they cross a sales or transaction threshold. Most large retailers now charge sales tax to every U.S. shipping address.
If you buy from a seller who doesn't collect sales tax, most states require you to remit use tax directly at the same rate. Out-of-state purchases for personal use, business equipment, and some online subscriptions can all trigger it. Enforcement is rare for individuals but routine for businesses during audits.
Common sales-tax mistakes
The most frequent error is using the state rate when the combined rate is different. A second is double-counting: applying state and local rates one after the other instead of adding them first. A third is rounding tax for each line item separately, which can drift a cent or two on long receipts — most point-of-sale systems compute tax on the cart subtotal to avoid this.
When estimating a budget for a road trip, look up the combined rate at your destination. Booking a hotel in Chicago at a quoted $200 plus 17.4% hotel tax means the real charge is $234.80, not $200. The same arithmetic works whether the rate is 4% in Honolulu or 17% on a hotel room.