Sales Tax Calculator

Gross Price x
Tax Amount x

Net Price

Sales Tax

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Sales Tax Calculator

Sales tax is a tax that is added while designing the MRP of a product or a service. Every time a consumer makes a purchase, he is indirectly paying sales tax to the government.

Sales tax is different from other kinds of taxes in the sense that sales tax is paid every time a product moves ahead to its next stage of manufacturing or production. All these intermediary taxes sum up in framing the final sales tax that is incorporated into the MRP.

☛ Factors on which Sales Tax Depends

Sales tax depends on various factors as explained below:

State rules

Different states have different rules for levying a sales tax. Accordingly, sales tax varies from state to state. A product that is exempted from sales tax in one state may be a subject of tax in another.

Some other states add their own sales tax on the products that were imported from another state, though they were subjected to sales tax in the state of their origin.

Type of Product

  • Sales tax varies with the product under consideration. For example, a state might levy sales tax on yarn, and make notebooks tax free. Or cigarettes may be, and medicines may be sales taxed. It all depends on the product the state is levying or not levying the tax.
  • Also, different items are subjected to different percentages of sales tax. This decision made by a state depends on many factors which beyond the scope of the current discussion.

Offline or Online Retailer

  • For a brick and mortar shop, the sales tax comes into the picture very straight. The retailer levies the tax on the product as per the state where the shop is established.
  • For online retailers, the picture is a little tricky. It all depends on the origin of the product, destination of the product and the number of intermediary steps involved.

Who bears the responsibility to bear sales tax?

As a retail buyer, you end up paying the sales tax to the retail seller. It is the responsibility of the retailer to collect sales tax from all the customers and submit the tax amount to the government before a prescribed date; failing which the retailer may be subjected to legal offenses too.

The sales tax seems to be politically acceptable than the income tax. – Raymond C. Scheppach

☛ Key Observations regarding Sales Tax

Depended on many such factors, sales tax often shows many interesting observations.

  • When the government raises sales tax on a product, the effect is not immediately seen. It has been found that it takes approximately six months to analyze consumer’s behavior of purchasing a product for which sales tax has been increased.
  • Consumers observe tax rates on various products and prefer to purchase the state where sales tax is lower.
If you increase the sales tax, everybody would be taxed. – Robert Strauss

☛ How Calculator Hut’s Sales Tax calculator helps you?

Use our sales tax calculator to decide on your purchase. Note sales tax of different states, and enter the net price of the product along with the sales tax percentage being levied. Our sales tax calculator shows the gross cost and the sales tax amount individually. You can understand how much you would need to pay in the form of sales tax.

It is that simple. You can also conveniently add our sales tax calculator widget to your website and make a sales tax calculation instantly. Just let us know your preferred customizations at [email protected], and we would design an attractive and colorful widget as per your taste. And this is all for FREE!!

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