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 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.