Sales Tax Calculator

A sales tax is an additional charge for goods or services you sell, and it supports local and state government operations. Sales tax regulations vary from state to state, so it can be challenging and not always difficult. Some states have a base sales tax rate that local municipalities can add to, while others do not impose any sales taxes.

Sales tax is always an indirect charge based on the product’s value and is imposed at the point of exchange or purchase. Sales taxes include retail, manufacturers, wholesale, use, and value-added tax (VAT).

What is Sales Tax?

The sales tax is a consumption tax paid to the government on selling goods and services. The vendor usually collects the sales tax from the customer at the time of purchase. Sales taxes are often called value-added taxes (VAT) or goods and services taxes (GST), which are different consumption taxes. 

Sales tax is only applied during the purchase process in some countries, and the listed prices reflect the value before tax. The prices listed in other countries include sales tax as part of their final after-tax value.

What is the Purpose of Sales Tax?

Sales taxes fund various municipal and state needs, from infrastructure to community projects. Different states use sales taxes in different ways, but their purpose is to improve the quality of life of their residents and the state.

What is a Sales Tax Calculator?

A sales tax calculator helps you determine the tax imposed on goods and services sold. This calculator calculates gross prices based on net prices and tax rates or reverses the process to calculate sales taxes. In the United States, there is a somewhat complicated system of sales taxes since the rate and the base of the tax vary from state to state.

What is the Sales Tax Formula?

Sales tax is calculated by multiplying two numbers together. Using the correct sales tax rate is one of the most challenging parts of calculating sales tax. The formula for sales tax is as follows:

Sales Tax = Net Price x Tax Rate

FAQs

What is My Sales Tax Rate?

The sales tax rate is generally set at the state level, but some states allow county, city, or local taxing districts to set their rates. A street address is much more accurate than a city name, street name, or ZIP code for determining your sales tax rate because so many jurisdictions generate rates, rules, and boundaries. Use our calculator above to get a U.S. street address-specific sales tax rate.

How to Calculate Sales Tax?

Sales tax percentages should be calculated from your sales total, but making sure the numbers are correct is more important. A sales tax calculator like Pipedrive’s can help you turn your metrics into clear insights, like how much sales tax to charge.

What Must I Remember While Calculating Sales Tax?

When calculating sales tax, consider the following factors: Sales tax may differ from state to state. You must pay sales tax based on your state and city of residence. Sales tax is calculated after adding the prices of all items. If there are multiple items, they are calculated in percentages.