Breakdown
How it works
Sales tax is added at the till on the pre-tax price. Working backwards from a receipt total, divide by (1 + rate) — subtracting the percentage from the total overstates the tax.
Formula
Total = price × (1 + rate)
Price = total ÷ (1 + rate); tax = total − price
Worked example
100 at 8.25% → 108.25. Receipt 108.25 → pre-tax 100, tax 8.25.
Frequently asked questions
Why does the US quote prices without tax?
Rates vary by state, county and city (0% in Oregon to over 10% in parts of Louisiana and Tennessee), so national retailers show pre-tax prices and add tax at checkout.
Sales tax vs VAT?
Sales tax is charged once, to the final consumer. VAT is charged at every stage with businesses reclaiming what they paid; the consumer bears the same end result.