How to Calculate Sales Tax (Forward and Reverse)
Add sales tax to a price, back it out of a total, handle combined state and local rates, and round the way states expect.
Actualizado 2026-10-20
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Sales tax is a percentage of the taxable price, added at the register. The arithmetic is simple; the rate is the hard part because it combines state, county, city and district rates.
Adding tax
tax = price × rate ÷ 100
total = price + tax$80 at 8.25%: tax $6.60, total $86.60.
Shortcut: total = price × (1 + rate ÷ 100) = 80 × 1.0825.
Reverse: finding the pre-tax price
Given a total that includes tax:
price = total ÷ (1 + rate ÷ 100)
tax = total − price$86.60 at 8.25%: 86.60 ÷ 1.0825 = $80.00. Do not multiply the total by the rate; 86.60 × 0.0825 = $7.14 is wrong.
Combined rates
The rate at the register is state plus local. Texas is 6.25% state with up to 2% local, capped at 8.25%. Louisiana is 5% state with parish rates that push many areas over 10%. Five states (Alaska, Delaware, Montana, New Hampshire, Oregon) have no state sales tax, although some Alaska towns charge a local one. Our sales tax calculator pre-fills the state rate and the average combined rate for all 50 states and DC and can look up a ZIP code for the exact combined rate.
Rounding
Most states round the tax on the total sale to the nearest cent. Florida and Maryland use bracket schedules that effectively round up at the half cent. Some retailers round per line item, which can differ by a cent from rounding the total. The calculator rounds half up on the total, and each state page says which method the state uses.
Tax-inclusive pricing
Gas stations and some restaurants post prices that already include tax. Use the reverse formula to see how much tax is inside. $4.199 per gallon with 8% tax inside is $3.888 before tax.
Discounts and tax
Tax applies to the price after a store discount but usually before a manufacturer’s coupon, depending on the state. $100 with 20% off at 8%: $80 taxable, $6.40 tax, $86.40 total.
In Excel
Tax: =ROUND(A1*B1,2) with the rate in B1 as 0.0825. Pre-tax from total: =ROUND(A1/(1+B1),2).
Rates on this site come from the Tax Foundation’s midyear 2026 tables, verified 2026-10-20, and are updated each January and July.
Worked examples
Restaurant bill with tip. Food $64.00 in Chicago at 10.25% combined (6.25% state, 1.75% county, 1.25% city, 1% transit): tax $6.56, total $70.56. Tip on the pre-tax amount at 18%: $11.52. Pay $82.08.
Car purchase. $28,500 at Texas 6.25% motor vehicle tax (motor vehicles use the state rate only, no local add-on): $1,781.25 tax. Trade-in credit reduces the taxable amount in Texas, so a $8,000 trade-in makes the tax 6.25% × $20,500 = $1,281.25.
Reverse from a receipt. The receipt shows $53.99 total and you need the pre-tax amount for an expense report at 7.25%: 53.99 ÷ 1.0725 = $50.34, tax $3.65.
Online purchase. Since the 2018 Wayfair decision, remote sellers collect tax based on the delivery address once they pass a state’s sales threshold. The rate is the combined rate at your door, which is what the ZIP lookup returns.
What is taxable
Groceries are exempt in most states, taxed at a reduced rate in a few (Illinois 1%, Missouri 1.225%) and fully taxed in a handful (Mississippi, Alabama at the state level). Clothing is exempt in Minnesota, New Jersey and Pennsylvania, and below a threshold in New York and Massachusetts. Prescription drugs are exempt almost everywhere. Services are generally untaxed except in Hawaii, New Mexico and South Dakota, which tax most services. Digital goods vary widely. When in doubt, the state revenue department publishes a taxability matrix.
Sales tax holidays
Many states suspend tax on school supplies, clothing or emergency gear for a weekend each year (Texas in August, Florida several times a year). During the holiday the rate is zero on qualifying items up to a price cap, and the calculator’s rate field can simply be set to 0.
Frequently asked
Is the rate applied per item or on the total? Legally on the taxable total of the sale, rounded to the nearest cent. Some point-of-sale systems compute per line and sum, which can differ by a cent. Both are generally accepted.
Do I pay sales tax on shipping? In about half of states yes if the item is taxable; in others shipping stated separately is exempt. Check the state.
What is a use tax? The same rate as sales tax, owed by the buyer when the seller did not collect it, for example on an out-of-state purchase. It is reported on the state income tax return in most states.