How do You Back Out Sales Tax?


In order to 'back out' sales tax, you'll need to know the tax rate of your state and city. For example, total tax in my city is 7.5%. If I purchase an item and the receipt reads $537.50, then I divide this amount by 1.075 and find the item cost exactly $500 before tax was added.
Formula: Total cost / (1.00 + percentage as a decimal) = Pre-tax price
Q&A Related to "How do You Back Out Sales Tax?"
1. Determine the sales tax rate for the item you are purchasing. Is the sales tax 6% 15% 2. Enter the total amount due on your calculator. Assume the total is $13.65. Enter that amount
The business seller's responsibility is to pay off all of the liabilities at closing.
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1. Look up the total sales tax rate for the locality in which you are calculating sales tax. The state sales tax rate is 6.25 percent, but each locality can have additional city,
1 Additional Answer
Here is an example of how to back out sales tax. If the price paid, including tax, is $10.53, and the tax rate is 8%, divide $10.53 by 1.08. This tells you the price before tax is $9.75.
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