A sales tax can be described as the money which is paid to a government for the sales of certain goods and services. Generally, the sellers are allowed to collect the tax from the consumers directly. In certain countries, the sales tax is also called as the Value Added Tax (VAT). When the purchase is done, the sales tax will be added to the listed price of the commodity. For instance, the sales tax rate of Luxembourg is 15% while that of another EU country Hungary is 27%.

Sales tax in the United States
While this is the case in the EU countries, the sales tax rate in the United States may range from 0% to 15.5% depending on the states and the type of goods and the services available. There are sales tax calculators that are helpful in figuring out any one of the following – before-tax price, tax rate, and final price.

Certain types of sales tax calculators are manufacturer’s sales tax, wholesale sales tax, retail sales tax, gross receipts taxes, excise tax, use tax, securities turnover excise tax, value added tax, fair tax, turnover tax, etc. Countries in Western Europe are some of the countries with the world’s highest value-added tax.

Although sales tax first evolved in Egypt and then in ancient Greece, sales tax was first applied in the US for the whiskey in 1791. Then slowly, one by one, the states start applying the sales tax, and it extends to 45 states in the US now. The sales tax cannot be confused with the Value added tax. The main difference of sales tax from the VAT is that the VAT is levied on the manufacturing or the entry level of the product whereas sales tax is applied at the retail level.

Sales tax can be described as a form of consumption tax. Sales tax varies geographically and is determined by various states, cities and municipal authorities. It can be said as an indirect tax which is charged at the moment of purchase of goods and services. It mainly depends on the government in charge and its policies.

Sales tax adds up to approximately one-third of the US state governments finance. The first state tax was imposed in 1821 in the state of Pennsylvania. Sales Tax can be said to be levied on the sale of the goods and services, but if the same goods and the services are sold again without such addition of value, then the sales tax cannot be levied again. The sales tax that is included in a company’s item can be calculated using reverse sales tax calculator.

In the United States, all the 45 states, and Washington D.C., all have the sales tax. Sales tax is different from state to state which means that each state has its own rules and laws regarding the sales and the sales tax. There is no concept of national and uniform sales tax in the United States.

For example, the sales tax rate in New Jersey is 6.875%, and the sales tax rate in New Mexico is 5.125%. The different states use their sales tax to build infrastructures and other public utility structures like road and public safety. In some time, if there is a deficiency in the state budget or if there is a demand for any public utility like a park, road, bridge, etc. then they raise the sales tax for a limited period on a special rate.

Sales tax calculation using sales tax calculator:

By using the below-mentioned sales tax calculator, sales tax can be calculated effectively:

Sale tax amount = price x (sales tax percentage/100)

Total price = price + sales tax amount

We can try this out with an example as provided below:

Let’s consider we are buying a ceiling fan for $75. Now let’s consider buying the ceiling fan from the state of New Mexico. Here the sales tax is 5.125%.

Calculations using sales tax calculator:

• Item cost= $7
• Sales tax= 5.12%
• Sales tax amount = 75 * (5.125/100) = $3.84
• Total amount = 75 + 3.84 = $ 78.84.

Listed below are some great websites with effective sales tax calculators that are efficient as well as trustworthy –salestaxstates, taxrates, and gstcalculator.

However, some states do not have sales tax in the United States. They are Oregon, New Hampshire, Delaware, Alaska and Montana. But in some of these states even in the absence of the general sales tax, there are still certain taxes like taxes for prepared food at 9%.

Sales tax is the backbone of the revenue of the United States, and yearly the revenue generating from the sales tax is increasing. However, there are many types of fraudulent practices and the black market that are coming about. It is always good to check the authenticity of the price and the product. They can be checked on the above websites.