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Sales Tax Formula:
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Sales tax is a consumption tax imposed by the government on the sale of goods and services. In the United States, sales tax rates vary by state from 4% to 11%, with an average rate of approximately 7% in 2025.
The calculator uses the sales tax formula:
Where:
Explanation: The formula calculates the tax amount by multiplying the original price by the tax rate expressed as a decimal. The total amount is then the sum of the original price and the tax amount.
Details: Accurate sales tax calculation is essential for businesses to comply with tax regulations, for consumers to understand the true cost of purchases, and for financial planning and budgeting purposes.
Tips: Enter the original price in dollars and the tax rate as a percentage. The calculator will automatically compute both the tax amount and the total amount including tax. All values must be valid (price > 0, rate between 0-100).
Q1: What is the average sales tax rate in the US?
A: The average sales tax rate in the United States is approximately 7% in 2025, but this varies significantly by state from 4% to 11%.
Q2: Are all items subject to sales tax?
A: No, some states exempt certain items like groceries, prescription drugs, or clothing from sales tax. The exemptions vary by state.
Q3: How do I find my local sales tax rate?
A: You can check your state's department of revenue website or use online tax rate lookup tools that provide current rates by zip code.
Q4: Is sales tax the same as VAT?
A: No, sales tax is applied only at the final point of sale to consumers, while Value Added Tax (VAT) is applied at each stage of production and distribution.
Q5: Do online purchases always include sales tax?
A: Since the South Dakota v. Wayfair Supreme Court decision in 2018, most online retailers are required to collect sales tax in states where they have economic nexus.