Sales Tax Calculator
Sales Tax Calculator. Free calculator to find the sales tax exclusive or inclusive from the sales amount and sales tax rate. A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually, laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax.
Often laws provide for the exemption of certain goods or services from sales and use tax, such as food, education, and medicines. A value-added tax (VAT) collected on goods and services is related to a sales tax. See Comparison with sales tax for key differences.
Conventional or retail sales tax is levied on the sale of a good to its final end-user and is charged every time that item is sold retail. Sales to businesses that later resell the goods are not charged the tax. A purchaser who is not an end-user is usually issued a "resale certificate" by the taxing authority and required to provide the certificate (or its ID number) to a seller at the point of purchase, along with a statement that the item is for resale. The tax is otherwise charged on each item sold to purchasers without such a certificate and who are under the jurisdiction of the taxing authority.
Other types of sales taxes, or similar taxes:
- Manufacturers' sales tax, a tax on sales of tangible personal property by manufacturers and producers
- Wholesale sales tax, a tax on sales wholesale of tangible personal property when in a form packaged and labelled ready for shipment or delivery to final users and consumers
- Retail sales tax, a tax on sales of retail tangible personal property to final consumers and industrial users
- Gross receipts taxes are levied on all sales of a business. They have been criticized for their "cascading" or "pyramiding" effect, in which an item is taxed more than once as it makes its way from production to final retail sale.
- Excise taxes, applied to a narrow range of products, such as gasoline or alcohol, are usually imposed on the producer or wholesaler rather than on the retail seller.
- Use tax, imposed directly on the consumer of goods purchased without sales tax, generally items purchased from a vendor, not under the jurisdiction of the taxing authority (such as a vendor in another state). Use taxes are commonly imposed by states with a sales tax but are usually enforced only for large items such as automobiles and boats.
- Securities turnover excise tax, a tax on the trade of securities.
- Value added tax (VAT), in which tax is charged on all sales, thus avoiding the need for a system of resale certificates. Tax cascading is avoided by applying the tax only to the difference ("value-added") between the price paid by the first purchaser and the price paid by each subsequent purchaser of the same item.
- FairTax, a proposed federal sales tax, is intended to replace the US federal income tax.
- Turnover tax is similar to a sales tax, but applied to intermediate and possibly capital goods as an indirect tax.
Most countries in the world have sales taxes or value-added taxes at all or several of the national, state, county, or city government levels. Countries in Western Europe, especially in Scandinavia, have some of the world's highest value-added taxes. Norway, Denmark and Sweden have higher VATs at 25%, and Hungary has the highest at 27% although reduced rates are used in some cases, such as for groceries, art, books and newspapers.