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 about Taxes

Related Questions

  • Q:

    Is there a tax rate calculator online for 1099 contractors?

    A:

    The most accurate source to estimate the tax rate for a 1099 contractor or self-employed person is from the Internal Revenue Service. This tool provides an easy to use worksheet online as part of the IRS Form 1040-ES.

    Full Answer >
    Filed Under:
  • Q:

    Where do I find the tax rate for a 401k retirement withdrawal?

    A:

    Information on the tax rate for a 401(k) withdrawal made during retirement can be found on the website of U.S. News and World Report under the site Money section. The tax rate depends upon the holder's tax bracket rate at the time of withdrawal from the account.

    Full Answer >
    Filed Under:
  • 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:

    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:

Explore