Forward and reverse sales tax
The forward calculation is simple: multiply the price by the rate and add it on. The reverse calculation trips people up. To find the pre-tax price from a total, you divide by (1 + rate), not multiply by (1 − rate). A $108.88 receipt at 8.875% means the item was $100.00 — not $99.22, which is what you get if you subtract 8.875% of the total.
Reverse sales tax is what you need for expense reports, for pricing products so they land on a round total, and for checking whether a store applied the right rate.
If you know both the price and the total but not the rate, choose 'Price and total (find the rate)'. The calculator divides the tax by the pre-tax price: ($108.88 − $100) ÷ $100 = 8.88%, which rounds from New York City's 8.875%. Because receipts round to the cent, small purchases can only pin the rate to about two decimals; use a larger purchase for a precise answer.
Finding your sales tax rate
US sales tax is a combination of a state rate and, in most states, county, city and special-district rates. The combined rate is what appears on your receipt. State rates range from 0% (Delaware, Montana, New Hampshire, Oregon; Alaska has no state rate but allows local tax) to 7.25% in California, and combined rates in some cities exceed 10%. New York City is 8.875%; Chicago is 10.25%; Seattle is around 10.35%.
Your state department of revenue publishes rate lookups by address, and any recent receipt from a local store shows the rate you're actually paying.
What's usually exempt
Most states exempt unprepared groceries and prescription drugs; many also exempt clothing below a threshold (New York exempts items under $110) or hold annual sales-tax holidays for back-to-school shopping. Services are taxed in some states and not others. Online purchases are now taxed by nearly every state at the rate of your delivery address.
Forward and reverse
Total = Price × (1 + rate) · Price = Total ÷ (1 + rate)
- rate = combined state + local rate as a decimal (8.875% → 0.08875)
Common mistakes this calculator helps you avoid
- ✕Subtracting the rate from a total to reverse it. Divide by (1 + rate) instead; subtracting understates the pre-tax price.
- ✕Using the state rate alone. Local add-ons average 1–5 points and reach 7+ in some states; the receipt rate is the combined rate.
- ✕Assuming online orders are tax-free. Since 2018, nearly all major sellers collect tax at your delivery address.
- ✕Forgetting exemptions. Groceries, prescriptions and (in some states) clothing are exempt or reduced — a receipt with mixed items won't tie out to one rate.
- ✕Applying the store's state to a shipped order. Destination-based sourcing means the buyer's address sets the rate.
Key terms
- Combined rate
- State rate plus all applicable local rates — the rate on your receipt.
- Use tax
- The tax you owe your home state on untaxed purchases; rarely collected from individuals but legally due.
- Economic nexus
- The sales threshold (commonly $100,000) above which a remote seller must collect a state's sales tax.
- Destination sourcing
- Taxing a sale at the buyer's delivery address rather than the seller's location.
Frequently asked questions
+How do I calculate sales tax backwards?
Divide the total by one plus the rate as a decimal. For a $54.25 total at 8.5%, the pre-tax price is $54.25 ÷ 1.085 = $50.00, and the tax is $4.25. Select "Total after tax (reverse)" above to do this automatically.
+Which states have no sales tax?
Delaware, Montana, New Hampshire and Oregon have no state or local sales tax. Alaska has no state sales tax but some municipalities charge their own.
+Is sales tax charged on shipping?
It depends on the state. Many states tax shipping when the items shipped are taxable; some exempt separately stated shipping charges. Check your state's rules if you sell online.
+Do I pay sales tax on a used car from a private seller?
In most states, yes — the DMV collects it when you register the vehicle, based on the purchase price or book value. A handful of states exempt private-party sales.