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.
Determine the final purchase price to find out the basis for the sales tax. The state of Arkansas computes the total delivery price, which includes freight charges, extra equipment, any rebates and any extended warranties, but not federal excise tax.
Convert the percentage to a decimal. For example, for most residents, the tax rate is 6.5 percent, as of 2014. In decimal form, 6.5 percent is 0.065 percent. Assuming the purchase price of the vehicle were $10,000, you multiply $10,000 by 0.065. In this example, the result is $650.
Calculate the total cost of the vehicle purchase by adding the amount of the purchase price to the amount of taxes required. In the above example, add $10,000 and $650 together to equal $10,650. (The total includes the purchase price and tax.)
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.Full Answer >
The reverse sales tax formula is written as original price = final price / (1 + sales tax rate), according to Accounting Coach. First, determine the cost of the item without sales tax. Calculate this by dividing the final purchase price by 1 plus the sales tax rate, which equals the item’s cost before the sales tax. Second, subtract the answer computed in step one from the amount paid.Full Answer >
To calculate reverse sales tax, a person must convert the local sales tax to a decimal. Once that is done, he must add one to the decimal representing his sales tax. After that, the only thing left to do is divide the total price by the number obtained, which results in the original price. This makes the equation original price = total price / 1 + sales tax.Full Answer >
One example of an indirect tax is sales tax, which is imposed entirely on the buyer rather than both on the seller and the buyer. Indirect taxes are taken from stakeholders that are generally not thought to be entirely responsible for the amount being taxed.Full Answer >