Q:

How is tax added to a price?

A:

Quick Answer

Tax is added to the price of a product by first determining the tax amount by multiplying the tax rate by the product price, and then adding the tax amount to the product price, according to the Basic-mathematics.com. Tax rates are determined by each state.

Know More
How is tax added to a price?
Credit: Vincent Ricardel The Image Bank Getty Images

Full Answer

Tax Foundation states that there are two possible tax rates that can be applied to a product price: state sales tax and local sales tax. State taxes are charged by 45 states while local taxes are charged in only 38 states. The highest combined sales tax, according to Tax Foundation, can be found in Tennessee, with a total combined state and local tax rate of 9.45 percent.

Learn more in Taxes

Related Questions

  • Q:

    What is the formula for calculating income tax?

    A:

    The formula for calculating income tax is the product of the total amount of taxable income multiplied by the tax rate, according to the Internal Revenue Service. The formula to account for multiple marginal tax rates requires multiplying the total amount of money earned in each successive bracket by the tax rate and adding the values together.

    Full Answer >
    Filed Under:
  • Q:

    How much is the import tax from China to the USA?

    A:

    The import tax from China to the United States varies based on the product. For instance, the maximum amount of tariff for imported eel products is 16 percent, while the same maximum for imported zinc oxide is 5.5 percent.

    Full Answer >
    Filed Under:
  • Q:

    What is a federal excise tax?

    A:

    Federal excise taxes are taxes imposed by the federal government on specific goods and services that are often included in the price of the product, according to the Internal Revenue Service. Excise taxes are commonly applied to products such as gas, cigarettes and alcohol.

    Full Answer >
    Filed Under:
  • Q:

    What does "backup withholding" mean?

    A:

    Backup withholding is a tax amount that is taken from certain payments under a specific set of circumstances. Not everyone is subject to backup withholding, and those who are receive a "B" form from the IRS.

    Full Answer >
    Filed Under:

Explore