When browsing in your favorite department store, the prices listed aren't actually telling you the total cost. Most cities and states charge a sales tax, driving the price of a cool new jacket or a fabulous piece of jewelry past what is listed on the tag. Depending on where you are sales tax may differ, so it's important to be able to quickly and easily figure out how much you'll be charged at checkout. Follow one of these easy methods to figure out your final tab.
Steps
Calculating the Exact Amount of Sales Tax
- Determine the sales tax rate in your location. You can look it up online or ask a sales associate what it will be. While states usually set a statewide sales tax, some municipalities add their own taxes on top of that. This means that the sales tax rate can vary drastically when moving between different cities or counties.
- Sales tax is not charged on all items you buy. Check online to see what is, and is not, taxed in your area. [1]
- Convert the sales tax percentage into a decimal figure. Take the percent number and imagine a decimal point after it. Now move that decimal point two spaces to the left, giving you the decimal equivalent of the sales tax percentage. For example, if the sales tax rate is 8%, the decimal figure will be .08.
- Multiply the price of the item by the decimal figure you calculated in the previous step. This calculation will give you the amount of tax that will be charged for your purchase. For example, if the item you want to buy is $20, multiply 20 times .08 and you get 1.6. That means you will have to pay $1.60 in sales tax.
- Add the amount of tax you calculated to the listed price. This will give you the total price you will have to pay at the register. Using our same example once again, if you will be charged $1.60 on your $20 item, simply add 1.6 to 20, for a total of $21.60.
Estimating the Amount of Sales Tax
- Round the sales tax rate to 10%. No matter what the actual tax rate is, this will make your multiplication much simpler. The goal in estimating sales tax is to make the math simple enough to do in your head. Don't bother with exact amounts, just estimate well enough to make sure you have enough money to pay for what you want to buy. By using an estimate of 10% it will mean that, in most cases, you are rounding up, making your estimate more than you will actually pay.
- If you are actually rounding the tax rate down, make sure to remember that your estimate will be a little bit less than you will need to pay.
- Move the decimal point in the cost of your item one space to the left. This will give you a good, quick estimate of how much tax you will be charged. No need for complicated calculations, just move the decimal over and that will give you 10% of the cost on the tag.
- In doing this, you are actually multiplying the cost of your item by the decimal equivalent of 10%, which is obviously really easy! For example, .10 times $20 equals $2.
- Add the estimated tax to the cost of the item. Because we rounded up, your estimate will probably be higher than the tax actually charged, but you will know you can afford to pay the total cost. To use our example from the previous step one more time, $20 plus $2 makes the estimated total cost including tax $22.
Tips
- If you can't do arithmetic in your head, use a common calculator to calculate sales tax.
- Sales tax rates can differ on different products, so keep that in mind when calculating your cost. For example, tax rates on liquor and cigarettes are significantly higher in most regions.
- Only five states have no state sales tax. They are Alaska, Montana, New Hampshire, Delaware, and Oregon. [2]
- Native American people are exempt from having to pay sales tax.
Related wikiHows
- How to Calculate Sales Tax
- How to Find Sales Tax
- How to Work With Percentages of Increase and Decrease
Sources and Citations
Cite error: <ref> tags exist, but no <references/> tag was found
from How to of the Day http://ift.tt/1hEjSVV
