How sales tax is calculated
Sales tax is a percentage of the purchase price. Convert the rate to a decimal (7.5% is 0.075), multiply by the price to get the tax, then add it to the price. A quicker route to the total is to multiply the price by 1 plus the rate: $100 × 1.075 = $107.50.
The rate that matters is the combined rate for where the sale takes place: the state rate plus any county, city or special-district taxes. That's why two stores a few miles apart can charge different tax on the same item.
State and local rates
Most states charge a statewide sales tax, and many let counties, cities and special districts add their own on top. California is a good example: the statewide rate is 7.25%, and local district taxes ranging from 0.10% to 2.00% are added in many areas, with some places having more than one. A purchase in a city with a 1% district tax would be taxed at 8.25% in total.
Because local rates change and differ from place to place, look up the exact rate for an address on your state revenue department's website (California's, for example, has a lookup by address). This calculator doesn't include a rate table, so enter the combined rate you find.
Working backward from a total
To find the price before tax from a total that includes tax, divide by 1 plus the rate. Don't subtract the rate from the total: taking 7.5% off $107.50 gives $99.44, not $100, because the tax was figured on the smaller pre-tax amount. That's useful for expense reports, splitting a bill or checking a receipt.
At tax time, sales tax you paid may matter too. If you itemize deductions on your federal return, the IRS lets you choose to deduct state and local general sales taxes instead of state and local income taxes, using either your actual receipts or the IRS optional sales tax tables.
The sales tax formulas
Sales tax = price × rTotal = price × (1 + r)Price before tax = total ÷ (1 + r)- r = combined sales tax rate as a decimal (7.5% = 0.075)
- price = the pre-tax price; total = the amount paid including tax
Example
- A $100.00 purchase at a combined rate of 7.5%.
- Sales tax = $100.00 × 0.075 = $7.50.
- Total = $100.00 + $7.50 = $107.50.
- Reverse: a $107.50 receipt at 7.5% was $107.50 ÷ 1.075 = $100.00 before tax.
- In a California city with a 1% district tax (7.25% + 1% = 8.25%), a $200.00 purchase carries $16.50 tax, for $216.50 total.
Frequently asked questions
How do I calculate sales tax on a price?
Multiply the price by the tax rate as a decimal. At 7.5%, a $100 item has $7.50 tax, so you pay $107.50.
How do I take sales tax out of a total?
Divide the total by 1 plus the rate. $107.50 ÷ 1.075 = $100.00. Subtracting 7.5% of the total ($99.44) gives the wrong answer.
Why is the tax on my receipt different from the state rate?
Most places add local taxes to the state rate. In California, the 7.25% statewide rate plus local district taxes of 0.10% to 2.00% means many areas pay more than 7.25%. Some items may also be taxed differently or exempt.
Is sales tax deductible?
If you itemize on your federal return, you can choose to deduct state and local general sales taxes instead of state and local income taxes, based on actual receipts or the IRS optional tables. You can't deduct both.
What does "tax as a share of the total" mean?
It's the portion of what you paid that was tax. At 7.5%, $7.50 of a $107.50 total is tax, which is 6.98% of the total, less than the 7.5% rate because the rate is applied to the pre-tax price.
Sources
Last reviewed for 2026. How we calculate.