Q:

How do you back out sales tax?

A:

Quick Answer

The formula to back out sales tax from a purchase is written as total price / 1 + sales tax rate = cost without sales tax, according to the financial section of the Houston Chronicle. To determine the cost of the item without sales tax, one would divide the final price by 1 plus the sales tax rate.

Know More

Full Answer

The NBC News Answer Desk explains how to back out the sales tax from a purchase as a step-by-step process. Assuming that an item costs $10,000 at the register and that the state sales tax rate is 8 percent, one would lay out the information as a formula: item + tax (8 percent) = $10,000. Then one would convert the percentage tax into a decimal form and add 1, which is 1.08. Thirdly, one would solve for item by dividing both sides of the equation by the tax that was expressed as 1.08 in the previous step. One would start with the formula "item + 1.08 = $10,000" and divide the terms. Thus, (item +1.08)/1.08 = 10000/1.08, which is 9259.25, is the cost of the item without the sales tax. The only tricky part is converting the percentage tax into a decimal form in the second step. If the state sales tax is 8 percent, then one would express the percentage in the formula as 0.08 and add 1. Therefore, (1 + sales tax rate) = (1 + 0.08), which equals 1.08.

Learn more about Taxes

Related Questions

  • Q:

    Which states have no sales tax?

    A:

    As of 2014, there are four U.S. states that do not impose a sales tax on consumers: Delaware, Montana, New Hampshire and Oregon. While Alaska does not impose a state sales tax, city governments do have the right to impose some sales tax there, meaning the average Alaskan retail shopper pays about 1.69 percent in sales tax.

    Full Answer >
    Filed Under:
  • Q:

    What is the quickest way to calculate sales tax?

    A:

    The quickest way to calculate sales tax is to take the sales tax rate in an area and multiply it by the dollar amount of the goods or services subject to the tax. For example, if there is a 6 percent sales tax on all purchases and a purchase is $200, multiplying 6 percent by $200 gives a result of $12.

    Full Answer >
    Filed Under:
  • Q:

    How do you calculate the sales tax on used cars in Arkansas?

    A:

    Multiply the purchase price of the used vehicle by the 2014 Arkansas sales tax rate of 6.5 percent to determine the sales tax you need to pay when you buy a used car in Arkansas. Those who buy a vehicle in Texarkana are required to pay 7 percent sales tax, as of 2014.

    Full Answer >
    Filed Under:
  • Q:

    Where can you find the sales tax rate for San Francisco?

    A:

    The California State Board of Equalization publishes the sales tax and use rates for all California cities, including San Francisco, on its official website, BOE.ca.gov. The website organizes rates by city in an alphabetized format for ease of use.

    Full Answer >
    Filed Under:

Explore