How To Calculate Sales Tax

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Sales tax can sneak up on you — especially with larger purchases. Knowing how to figure it out ahead of time can save you from sticker shock at the register. Just take the item’s price and multiply it by the sales tax rate in your area. That’s your extra cost.

How To Calculate Sales Tax: Formula and Example

If you know the price of an item and your local sales tax rate, calculating the total cost is simple. To find the sales tax amount, multiply the item’s price by the sales tax rate expressed as a decimal.

• Sales tax formula: Item price x Sales tax rate (as a decimal)

See How Sales Tax Adds Up

Say you’re buying a refrigerator that costs $1,200 and your local sales tax rate is 6%.

• $1,200 x 0.06 = $72 in sales tax
• $1,200 + $72 = $1,272 total cost

How To Calculate Sales Tax in Reverse

If you don’t know the sales tax rate or it’s not printed on your receipt, you can work backwards to figure it out.

Here’s an example:

Michael buys a toy priced at $5.00 and pays $5.30 total at checkout.

To find the sales tax rate:

• Step 1: Subtract the item price from the total paid to find the tax amount. $5.30 ??’ $5.00 = $0.30
• Step 2: Divide the tax amount by the item price. $0.30 ÷ $5.00 = 0.06, or a 6% sales tax rate

What Is Sales Tax?

Sales tax is a government-imposed tax on most goods and services. You pay it at the time of purchase, and the retailer forwards it to state or local tax authorities.

Most states charge both a state and local sales tax, which are combined into the total rate you pay.

Here’s an example:

• The total sales tax rate in Franklin County, Ohio is 7.5%
• Ohio’s state sales tax rate is 5.75%
• The local sales tax rate for Franklin County is 1.25%

Sales tax helps fund public services like education and infrastructure. Some essentials, like groceries or clothing under a certain amount, may be tax-exempt depending on the state.

Which States Don’t Charge Sales Tax?

Five states don’t impose a statewide sales tax. Delaware, New Hampshire, Montana, and Oregon have no sales tax at all, while Alaska does not levy a state sales tax but allows local governments to charge local sales taxes in some areas.

Even in states that do collect sales tax, shoppers may still find relief through sales tax holidays. These limited-time events temporarily suspend sales tax on certain purchases, often for essentials like school supplies, clothing, or emergency preparedness items.

Pro Tip

Planning a big purchase? Time it with your state’s sales tax holidays. You’ll skip the tax and may score extra savings from retailers offering holiday discounts to attract more shoppers.

State Sales Tax Rates

Each state sets its own sales tax, and local municipalities may set their own rate, too. The chart below shows the state sales tax, the range of local tax rates and the total of state and local taxes. The following are estimated taxes for 2026:

Final Take

Before you make a purchase, it’s worth knowing how much extra sales tax you’ll owe — especially if it’s a large purchase like a car or home appliance. Here are some key points to remember:

• Multiply the item price by your local tax rate to estimate your total.
• To calculate sales tax backwards, divide the total by (1 + tax rate).
• Check your local and state rates to budget for large purchases.
• Keep your receipts to track sales tax, especially if you itemize deductions.

Elizabeth Constantineau contributed to the reporting for this article.

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