Sales tax is one of the few everyday calculations with a trap in it. Adding tax is easy; taking it back out is where most people go wrong.
How to add sales tax
- Convert the rate to a decimal by dividing by 100. 8.25% becomes 0.0825.
- Sales tax = price × rate.
- Total = price × (1 + rate).
Example: a $49.99 item at 8.25% tax. The tax is $49.99 × 0.0825 = $4.12, so the total is $54.11. In one step: $49.99 × 1.0825 = $54.11.
Another example: a $1,299 laptop in California, at the 7.25% statewide base rate. The tax is $94.18 and the total $1,393.18. Most California cities add local tax on top, so the real total is usually higher.
How to remove sales tax from a total
To find the price before tax from a receipt total, divide by 1 plus the rate:
Price before tax = total ÷ (1 + rate)
Example: a receipt for $108.25 at 8.25% tax. $108.25 ÷ 1.0825 = $100.00 before tax, so the tax was $8.25.
The common mistake is to take 8.25% off the total instead: $108.25 − 8.25% gives $99.32, which is wrong. The tax was charged on the pre-tax price, not on the total, so you have to divide.
Another example: $86.37 paid in a 6.25% area. $86.37 ÷ 1.0625 = $81.29 before tax, and the tax was $5.08.
Why your rate is higher than the state rate
The rate you pay at the register is usually several taxes stacked together: the state rate plus county, city and sometimes special-district rates. Chicago is a well-known example. Illinois charges 6.25%, and Cook County, the city and the regional transit authority bring the combined rate to 10.25%.
To find the exact combined rate for an address, check your state revenue department's website, which usually has a rate lookup.
State base sales tax rates
These are statewide base rates only. Local taxes add to most of them.
| State | Base rate | State | Base rate |
|---|---|---|---|
| California | 7.25% | Massachusetts | 6.25% |
| Texas | 6.25% | Michigan | 6% |
| Florida | 6% | New Jersey | 6.625% |
| New York | 4% | Washington | 6.5% |
| Pennsylvania | 6% | Arizona | 5.6% |
| Illinois | 6.25% | Tennessee | 7% |
| Ohio | 5.75% | Indiana | 7% |
| Georgia | 4% | Colorado | 2.9% |
| North Carolina | 4.75% | Nevada | 6.85% |
Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Some Alaska towns charge a local sales tax.
States change rates from time to time, so double-check with the state before relying on a figure for business use.
What gets taxed varies by state
- Groceries are exempt or taxed at a lower rate in many states.
- Clothing is exempt in some states, including Pennsylvania, New Jersey and Minnesota.
- Shipping charges are taxable in some states and not in others.
- Coupons: in many states a store's own discount lowers the taxable price, while a manufacturer's coupon may not.
Shopping with a discount?
Work out the sale price first, then add tax to the sale price. For example, 30% off $80 is $56, and $56 with 8.25% tax is $60.62. Our guide on how to calculate a discount covers the percent-off math, including stacked coupons.
Let the calculator do it
The Sales Tax Calculator adds tax to a price or removes it from a total at any rate, to the cent. The Discount Calculator handles the sale price and tax in one go.
Frequently asked questions
How do I calculate 7% sales tax?
How do I find the price before tax?
Which states have no sales tax?
Tools mentioned in this guide
Free, private and ready to use — no sign-up.