The IRS describes a general sales tax as a tax imposed at one rate on retail sales of a broad range of items. In the United States each state sets its own rules, and cities, counties and districts may add local rates, so the rate at the register is a combined rate. In Texas, for example, the state rate is 6.25 percent and local jurisdictions may add up to 2 percent, for a maximum combined rate of 8.25 percent.
Formula
sales tax = taxable price × rate
total = taxable price × (1 + rate)
Example
A $100 taxable sale at the Texas maximum combined rate: 100 × 0.0825 = $8.25 of tax, for a $108.25 total. Working backwards, a $108.50 total at 8.5% tax means a price of 108.50 ÷ 1.085 = $100.00.
When the seller does not collect it, the buyer may owe use tax instead. The guide to calculating sales tax covers discounts and reverse calculations, and the percentage calculator does the arithmetic.
Educational only, not tax advice; rates and exemptions vary by state.