How to find the sales tax of an item

Are you a small business owner that wants to better understand how to calculate sales tax? Maybe you are a consumer who wants to know how to calculate sales tax and know how much the product will end up actually costing you. Today, we will give a simple explanation of how sales tax is calculated and reflected in the financial records.

Table of Contents Show

How to calculate sales tax
Examples of how to calculate sales tax
What is sales tax?
Do you need to collect sales tax?
How to calculate sales tax
Example of how to find sales tax
How do you find the tax percentage?
How do you find the selling price with tax?
How do you figure out NC sales tax?

To determine how much sales tax to charge, multiply your customer’s total bill by the sales tax rate.

Example of how to find sales tax

Let’s say your business is located in Cleveland, Ohio. You don’t have a secondary business location. You must collect sales tax at Cuyahoga County’s rate of 8.00% (state sales tax of 5.75% + Cuyahoga County rate of 2.25%; Cleveland does not have a city sales tax). Your customer’s bill before adding sales tax is $399.

Sales Tax = $399 X 0.08

Sales Tax = $31.92

Collect an additional $31.92 from the customer for sales tax. Then, remit the sales tax to the appropriate government. Contact the state for more information.

Need help tracking your business’s income? Patriot’s small business accounting software makes it easy to organize your money records. Plus, we offer free support if you have any questions. Get your free trial today!

How do you find the tax percentage?

First, subtract the pre-tax value from the total cost of the items to find the sales tax cost. Next, create a ratio of the sales tax to the pre-tax cost of the items. Last, create a proportion where the pre-tax value is proportional to 100% and solve for the percentage of sales tax. Cross multiply and solve.

How do you find the selling price with tax?

If you know the state sales tax rate, you can calculate the retail price from the total price..

Divide the state sales tax rate by 100 to convert it to a decimal. ... .

Add 1 to the state sales tax rate as a decimal. ... .

Divide the result by the total price to find the retail price..

How do you figure out NC sales tax?

The state general sales tax rate of North Carolina is 4.75%. North Carolina cities and/or municipalities don't have a city sales tax. Every 2022 combined rates mentioned above are the results of North Carolina state rate (4.75%), the county rate (2% to 2.25%), and in some case, special rate (0% to 0.5%).