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:

    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 percentage?

    A:

    Calculate sales tax percentage by multiplying the percentage of the sales tax by the total cost of the item(s) subject to the tax, states Basic-mathematics.com. To find the tax percentage rate on a purchase using only the subtotal and amount of tax, divide the total cost by the pre-taxed amount.

    Full Answer >
    Filed Under:
  • 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 a reverse sales tax calculator?

    A:

    A reverse sales tax calculator lets a user figure out the amount of an original sale price before sales tax, according to Calculator Pro. The user inputs two values: the total amount that includes the sales tax and the sales tax percentage.

    Full Answer >
    Filed Under:

Explore