# How to Reverse Calculate the Sales Tax Amount and the Selling Price out of the Final Price With Tax (After Tax)

### What is the "Sales Tax"? What is the "Sales Tax Rate"?

• The Sales Tax is a consumption tax imposed by states, counties or/and cities and municipalities in the United States on the sale of goods and services.
• The sales tax is paid by the final consumer to the retailer at the point of sale as a percentage of the selling price of the sold good or service.
• This percentage, called the Sales Tax Rate, varies from state to state, in Texas for example there is a general sales tax rate of around 6.25%.
• To continue our example above, cities and/or municipalities of Texas are also allowed to collect their own sales tax with rates ranging up to 2%. So a combined sales tax rate could build up to 8.25% or even more if we also add the county sales tax rate...
• 6.25% is the lowest possible sales tax rate in Texas, 6.3%, 6.5%, 6.75%, 7%, 7.25%, 7.5%, 7.75%, 8%, 8.125% or 8.25% are other possible sales tax rates.

### Example on how the Sales Tax is being collected along the commercial chain

• Let's say that a farmer sells apples to a company that produces cider.
• To avoid paying the sales tax, the cider maker must obtain a resale certificate from the government saying that it is not the end user.
• The cider maker then sells its product on to a retail store, which will charge the final customer the sales tax along with the price of cider.

### Sales Tax formula:

• "Sales tax amount" = "Sales tax rate%" × "Price without sales tax".

### Example on how the Sales Tax is reversed calculated out of the final price of the good (or service) that is being sold

• Let's say that a person who lives in an area where the sales tax rate is 5% bought some cider and had to pay a total of a \$525 dollar bill that already had the sales tax included.
• "Sales tax amount" = "Sales tax rate%" × "Price without sales tax".
• "Sales tax charged price"
• = "Price without sales tax" + "Sales tax amount"
• = "Price without sales tax" + "Sales tax rate%" × "Price without sales tax"
• = "Price without sales tax" × (1 + "Sales tax rate%").
• "Price without sales tax"
• = "Sales tax charged price" ÷ (1 + "Sales tax rate%")
• = \$525 ÷ (1 + 5%)
• = \$525 ÷ (1 + 5/100)
• = \$525 ÷ (1 + 0.05)
• = \$525 ÷ 1.05
• = \$500 dollars.
• That person had to pay a "Sales tax amount"
• = "Sales tax charged price" - "Price without sales tax"
• = \$525 - \$500
• = \$25 dollars.

### Formulas: How to reverse calculate the Sales Tax and the Selling Price Without the Sales Tax out of the Final Sales Tax Charged Price?

• "Sales tax amount" = "Sales tax rate%" × "Price without sales tax"
• "Sales tax charged price"
• = "Price without sales tax" + "Sales tax amount"
• = "Price without sales tax" + "Sales tax rate%" × "Price without sales tax"
• = "Price without sales tax" × (1 + "Sales tax rate%")
• In conclusion:
• "Price without sales tax"
• = "Sales tax charged price" ÷ (1 + "Sales tax rate%")

### Examples on reverse calculating the selling price without the sales tax:

• Example 1. If "Sales tax rate" is 5% and we paid a final total "Sales tax charged price" of \$525 dollars:
• "Price without sales tax"
• ="Sales tax charged price" ÷ (1 + "Sales tax rate%")
• = \$525 ÷ (1 + 5%)
• = \$525 ÷ (1 + 5/100)
• = \$525 ÷ (1 + 0.05)
• = \$525 ÷ 1.05
• = \$500 dollars;
• "Sales tax amount"
• = "Sales tax charged price" - "Price without sales tax"
• = \$525 - \$500
• = \$25 dollars;

### Online Calculator: Reverse Calculate The Sales Tax Amount That Was Included Into The Total Final (After Tax) Price, Find Price Before Tax, Answer, Formula and Explanations

• Example 2. If "Sales tax rate" is 6.5% and we paid a final total "Sales tax charged price" of \$745.5 dollars:
• "Price without sales tax"
• = "Sales tax charged price" ÷ (1 + "Sales tax rate%")
• = \$745.5 ÷ (1 + 6.5%)
• = \$745.5 ÷ (1 + 6.5/100)
• = \$745.5 ÷ (1 + 0.065)
• = \$745.5 ÷ 1.065
• = \$700 dollars;
• "Sales tax amount"
• = "Sales tax charged price" - "Price without sales tax"
• = \$745.5 - \$700
• = \$45.5 dollars;

### Online Calculator: Reverse Calculate The Sales Tax Amount That Was Included Into The Total Final (After Tax) Price, Find Price Before Tax, Answer, Formula and Explanations

• Example 3. If "Sales tax rate" is 10.5% and we paid a final total "Sales tax charged price" of \$1,878.5 dollars:
• "Price without sales tax"
• = "Sales tax charged price" ÷ (1 + "Sales tax rate%")
• = \$1,878.5 ÷ (1 + 10.5%)
• = \$1,878.5 ÷ (1 + 10.5/100)
• = \$1,878.5 ÷ (1 + 0.105)
• = \$1,878.5 ÷ 1.105 = \$1,700 dollars;
• "Sales tax amount"
• = "Sales tax charged price" - "Price without sales tax"
• = \$1,878.5 - \$1,700
• = \$178.5 dollars;