How to use the sales tax calculator
The Add sales tax tool builds the total for a purchase.
- Enter the price per item and the quantity. Use the shelf or list price before tax.
- Enter the state and local rates. The local rate covers county, city and special district taxes. Combined rates can differ between neighboring cities, and for deliveries the rate usually follows the delivery address. Your receipt or the state revenue department’s rate lookup shows the exact figure.
- Add a store discount, if any, as a percentage. It comes off before tax.
- Add shipping and choose whether your state taxes it.
The results show the total, the tax, the combined rate, the state and local parts of the tax and the cost per item. The table repeats the purchase at other combined rates.
The Remove sales tax tool works backwards from a total that already includes tax.
The formula
Taxable amount = Price × Quantity × (1 − Discount) + Shipping (if taxable)
Sales tax = Taxable amount × Combined rate
Total = Price × Quantity × (1 − Discount) + Shipping + Sales taxRates are decimals in the formula (8.25% = 0.0825).
A worked example
You buy 2 items at $120 each, with a 10% store discount and $12 shipping. The state rate is 6% and the local rate 2.25%, so the combined rate is 8.25%.
The discount takes the goods from $240.00 to $216.00. Shipping is not taxed here, so the sales tax is $17.82: $12.96 for the state and $4.86 for the locality. The total is $245.82.
If your state taxed shipping, the tax would rise to $18.81 and the total to $246.81.
What changes the tax most
| Change | Sales tax | Total |
|---|---|---|
| Example as entered | $17.82 | $245.82 |
| No discount | $19.80 | $271.80 |
| Shipping taxed | $18.81 | $246.81 |
A discount taken before tax saves twice: once on the price and again on the tax that would have been charged on it. Store coupons usually work this way. Manufacturer coupons are often treated differently, because the store is reimbursed for them, and in many states the tax is charged on the price before the coupon.
The rate matters more than either. A few points of difference in the combined rate changes the tax on a large purchase by far more than the shipping question, which is why buyers of cars, appliances or furniture sometimes check the rate in neighboring jurisdictions. For vehicles, the tax normally follows the place where the car is registered, not where it is bought.
Sales tax compared with VAT
US sales tax is collected once, at the final sale to a consumer. Businesses buying goods for resale give the seller an exemption certificate instead of paying the tax. Prices are shown before tax and the tax is added at the register, which is why a US price tag never matches the amount you pay.
Most other countries use a value-added tax, collected in steps along the supply chain and included in the shelf price. For prices in those countries, use the VAT calculator.
What this calculator does not include
- Exempt and reduced-rate items. Many states exempt groceries, prescription drugs or clothing, or tax them at a lower rate. Leave such items out, or enter the lower rate.
- Sales tax holidays, when some states suspend the tax on certain goods for a few days.
- Caps and special rates, such as maximum tax on a single item or special rates on vehicles, fuel, lodging or prepared food.
- Use tax that you may owe directly to your state on untaxed purchases.
- Rounding. Sellers round the tax to the cent, per item or per invoice depending on the state.