Adding tax versus backing it out
Adding is the obvious direction: price × rate. The reverse — starting from a receipt total and finding the pre-tax price — trips people up, because you divide by (1 + rate) rather than subtracting the percentage. A $107.25 total at 7.25% is $100.00 before tax; subtracting 7.25% of the total would give the wrong answer of $99.47. The second mode does the division correctly.
Why the state rate is only the start
Five states (Alaska, Delaware, Montana, New Hampshire, Oregon) charge no statewide sales tax, and the rest range from 2.9% to 7.25%. But in most of the country the number on your receipt is the state base plus local additions — combined rates in parts of Alabama, Louisiana and Illinois exceed 10%. The dropdown prefills the statewide base; if you know your combined local rate, type it in directly.
What is and isn't taxed
Most states exempt or discount groceries and prescription drugs; some exempt clothing below a threshold. Online purchases are taxed by your delivery address, not the seller's location, since the 2018 Wayfair ruling. As always: this calculator does the arithmetic, your state's revenue department does the rules.
Frequently asked questions
How do I find the exact rate for my address?
Your state revenue department publishes lookup tools for combined state + local rates, and any recent receipt from a local shop shows the rate actually charged where you live.
Does this work for VAT or GST?
Yes — the arithmetic is identical. Type your VAT or GST percentage into the rate box and use the 'price already includes tax' mode for tax-inclusive prices, which is how VAT prices are usually displayed.
Is my data stored or sent anywhere?
No. Nothing you enter is transmitted.
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