Sales Tax Calculator USA



How USA Sales Tax Calculator works


how sales tax calculator us works

Is our out-of-this-world Sales Tax Calculator all you need to get the most out of your Sales Tax without having to be surrounded by any complications? Remember, knowing your Sales Tax doesn't have to be complicated, and that's why we decided to have your back because so you no longer have to be led astray most people don't.


Getting to know what exactly your sales tax is could be a pain in the neck, especially when it is your very first time with the Sales Tax. No matter which city or county you live in (in the United States or any part of America), paying Sales Tax is one of the responsibilities you have got to handle because we don't think that you want to see yourself in trouble, do you?


Another problem that most people face while getting to figure out how much Sales Tax they need to pay is the user interface (UI) or the functioning of the Sales Tax Calculator. However, that Sales Tax Calculator that you will use on this site will be offering you a simple yet effective experience and you will eventually be at ease, undoubtedly.


What is the Sales Tax?


what is sales tax

In order to pay the Sales Tax, you will need to calculate how much you're supposed to pay. But even before that, you should know what precisely the Sales Tax is.


The Sales Tax is a consumption tax that one needs to pay to the government when any goods or services are sold. This type of tax is collected by the vendor and consumer, while making purchases, has to pay it.

Now, depending on your geographic location, or from city to city, or state to state, or country to country, you might come across different forms of Sales Tax. In some nations, Sales Tax is known by another name called value-added tax (VAT) or it might be referred to as goods and services tax (GST).


You can check it yourself by taking a looking at the backside of any goods or services that you have purchased from any vendor. They usually add the GST or VAT to be paid by the consumer or customer. But it's not in their hands to add it or neglect it – it's what the government orders them to do so.



Where is Sales Tax applicable in the US?


Since the rate of Sales Tax applied to the goods and services and differ from counties to counties, therefore, knowing the applications of Sales Tax in your area is a much-do thing. However, as a matter of fact, the Sales Tax at the federal level does not exist in the United States. When it comes to the application to the statewide Sales Tax, all but five states have sales tax.


The states where there is no sales tax are Alaska, Montana, Delaware, Oregon, and New Hampshire. What about the District of Columbia, Guam, and Puerto Rico? Is the Sales Tax applicable in these states? As a matter of fact, the tax is applied.


Your locality, city, county, or even state play a significant role in the enforcement of the Sales Tax as you will see a difference in the rate of Sales Tax in areas that are not the same. But there is no need to be worried about anything since our Sales Tax Calculator is all you need to know the current sales tax rates in your locality.

Unlike value-added tax (VAT), Sales Tax is only imposed on retail purchases. The rate of sales tax normally goes from 0% to 16% depending on the area you reside in. There are some states in which there is no sales tax on prescription medicine and seeds foods, Texas, for example, however, an additional 10% tax is added to the alcoholic drinks' purchases that are immediately consumed. As far as Vermont is considered, it has a requirement of a 6% general sales tax.


Averagely, about 2 percent of an American is impacted just because of the sales tax and if you are living in any state or county of the United State, you can consider yourself one of those people who have to sacrifice about 2% of your personal income. But, there's nothing you can do about it as it is imposed in accordance with the rules made by the government.


The sales taxes are not as much important in England and the industrial Midwest as they are in the west and the south. Even some states, namely Florida, Tennessee, Washington, and Texas generate beyond 50% of their tax revenue using the sales tax. And, for some other states, the revenue percentage even goes to 60.


On the other hand, if we consider New York, it only makes about 20 percent of its revenues with the help of the sales tax.

There are different rules and regulations that come into play for different taxes in all states (in most if not all) or cities in the United


States of America that impact the rate of Sales Tax. Our Sales Tax Calculator has been designed in a way so that you could easily get to know your current rates of Sales Tax in next to no time.


Step-by-Step Guide to Sales Tax Calculator


How do you think you can effortlessly check out the current rates of your Sales Tax applicable in your state or city? Is it super easy to know the Sales Tax in any county of the United States (US)?


Yes, it is and the good news is that with the help of our advanced Sales Tax Calculator, it is time-saving, too.


We said it and we say it again that it's a child's play for anyone like you (whether you're a newbie or you're an advanced person) to check out the present-day sales tax price/rate with the help of our highly forward-thinking sales tax calculator.


All you have to do is just follow a couple of steps as furnished (laid out) underneath:


  1. At first, you need to open the desired state calculator by searching the state name in the search box.

  1. After that, you will see a link or possibly a tab about "Sales Tax Calculator" which you need to click on.

  1. Having clicked that link, you will need to enter the "Amount before taxes", choose Sales tax rate (4% or 5%, for example).

  1. Doing that, you will need to click on the button that says "Calculate".

The very next page will show you the exact Sales Tax Rate which will be a precisely-processed result by our Sales Tax Calculator.


Note: The Sales tax rate will differ from county to county, therefore, don't come unglued if you see the difference in the output after you're done with the inputting the data.


U.S. History of Sales Tax


US History of Sales Tax.png

Now, let's talk about the history of the Sales Tax (if you don't want to read the history and would like to jump to the calculator, please choose from above).


History says that the U.S., in 18th century, was still a British colony and during that period the King imposed the sales tax on a number of items and all of the American colonists had to go through a lot when that happened despite the fact that they had no representation in the British government.


So, this taxation without representation, among other things, led to a Boston Tea Party and all of it together resulted in the American Revolution. As a result, the birth of the U.S. had relatively to do with the controversy over a sales tax. The sales tax has had a rocky history in the U.S. ever since and maybe this is the reason why there has never been any federal sales tax in the U.S.


Some former attempts at the sales tax cause a lot of problems and this type of tax didn't take off until there was the Great Depression situation i.e. when the government was finding ways in order to raise the revenue magnificently.


Among other methods tested with that purpose, the sales tax turned out to be satisfactory because that time (in the 1930s) the economic policy was positioned on the selling goods. Mississippi State was the first in 1930 and it rapidly adopted across the country.


In the present day, the sales tax is imposed in most of the states or counties in the United States with an intention to raise revenue for the local and state governments. Putting different, in order for the governments to do good for you and your beloved ones, they must be getting revenue from somewhere and that's where they get it from – when the tax is paid in different forms.


How to Deduct Sales Tax in the U.S?


Is there a way to deduct the sales tax while living in the United States? It may sound impossible to some folks like you, but believe me, it's not what you think. Let's shed light on the tips on how you can deduct Sales Tax in the United States (US).


While you fill out your federal income tax, you are required to either choose standardizing deduction or itemizing deductions. It's not obligatory for everyone to either choose the former method or the latter one – you can pick up any method you like to go with. However, most of the Americans prefer the standard deduction method for the fact it is hassle-free.


In order to deduct the sales tax, you must, at any cost, itemize the deductions from the federal income tax because that's the only option you have got. Furthermore, you are highly recommended to keep detailed records if you plan to itemize deductions because the IRS requires you to submit sales tax records. It also is helpful in the determination of the sales tax amount paid.


Once the choice between standardizing and itemizing deductions has been made, another choice you will be supposed to make is whether or not you need to claim either state and local income or sales taxes (but not both). Most of the people (taxpayers) prefer deducting income taxes as it leads to a larger figure.


Having said that, it could be a blessing in disguise for the people who made larger purchases during the year to deduct sales tax rather than income tax if their total sales tax payment surpasses state income tax. If you're one of those who paid for a new car, vacation, engagement ring, or multiple major appliances during the tax year, you're likely to have greater sales tax payment than income tax payment.


Taxable Items


What are the taxable items? Putting different, you got to know at what items the sales tax is imposed. Well, the government imposes sales tax only taxable transfers of goods or services. This is to be noted that not all transfers are to be considered taxable. The government is likely to impose the tax on sales to businesses and to consumers.


I hope you can now figure out what items the sales tax shall be imposed on.


Taxable Sales:


When it comes to the transferring of tangible property for the cash or the promise to pay the sales (cash) are frequently subject to sales tax, with exceptions. Depending on different states, the sales tax or documentary tax might also be imposed on transfers of real property.


No matter how many gift cards you purchase, they won't be subject to the sales tax in all states. However, the government will charge the sales tax if you use the gift cards as a mode of payment for taxable goods or services.


Also, there was a time when a proposal was brought forward by someone that the sales tax should be imposed on the purchase of gift cards, and not on the usage of them. But that proposal failed and no one then paid attention to it.


Rentals:

In some states in the U.S., the rental of tangible personal property is also taxed. There are only states that impose sales tax on the rental of the commercial real estate and it is Florida. You can find out more about the sales tax guide on the official website of Florida.


Exempt Organizations:

Though the sales tax is imposed on most of the businesses or consumers, some states exempt religious, charitable, and some specific organizations from the payment of sales tax. In general, this type of exemption would not be applied to a trade or business that is conducted by the government.


Use Tax:


The states that impose a sales tax also charge a similar tax on buyers of taxable property or services and this happens in those situations when sales tax is not paid. Functionally, the use tax is as same as sales tax. Again, the imposition of the "Use tax" differs from state to state. Whether or not you're supposed to pay this type of tax depends where you're currently residing in the United States (US).


Taxable Value:


Generally, the amount that is subject to sales tax is considered to be the net sales price and such price, in general, is after any relevant documents. There are some states that offer the exemption (as a portion of sales or purchase) from tax for classes of goods. There is other valuable information about the taxable value that you can find out by going to your state's website.


Taxable Goods:


One thing to note down is that there is no state that imposes sales tax on all types of goods. With that in mind, the state laws are different in terms of to what goods the tax is subject to. Often the prescription medicines or food for consumptions and preparation at home are not taxable, but you will definitely find the restaurant meals taxed.


Just like we discussed earlier, even in the case of taxable goods, the exemptions could be offered by the government for some particular type of goods or services, it's not for all goods though. Just like goods, some sort of exemption may be provided for the goods whether it is purchased from a grocery store or somewhere else.


Services:


Speaking of "Services", some states impost tax on them whereas the rest of the states don't do that. Therefore, if you would like to know whether or not the services are taxed in your state, you'd be in need of going through the list listing the states where services are taxed. With that said, whether you are a doctor, attorney, or a dentist, following the laws in your state, you might be required to pay for the service tax.


On top of that, most states, on the other hand, charge tax on the services that are an integral part of the producing goods, for example, printing or cabinet making. Undoubtedly, the services offered by the organizations or companies are various and if we talk about telecommunication, they are subject to tax in different states of the U.S.


As far as the "Internet" services are concerned, there'd be only a few states that would tax such services in real life. One of the services that are rarely taxed is construction, however, materials that have been used in the construction might be subject to the tax as they come from subcontractors, builders, or any related person. The best-case scenario could also be that you don't have to pay anything at all.


Intelligible Property:


What about the Intelligible Property? Are you supposed to pay for this type of Intelligible Property tax?


Well, there are some states that bring the imposition of a tax to life while other states impose the specific type of intangible property or license transfers. According to state courts, it has been found that the intangible rights transfers are to be subject to the sales tax, when not specifically exempted from the tax.


Sales for Resale:


All states provide the exemption from the sales or use tax purchases on the goods made for resale in the same form. In some states, you will also see the rental of purchased property included in the resale. Moreover, if you use the property before the sale, that would defeat the purpose – resale exemption.


In some areas, the goods that you have purchased for free distribution may also be imposed a tax, however, that's not the case in all of the states. If purchases on goods are done with the intention of the performance of services, it may be taxed as per the state laws.


You will also be taxed on the purchases of foods (as part of the service) that you get while staying in a hotel or enjoying the flight to your favorite place – Hong Kong, New York City, or anywhere else. While you might be charged for such goods or items, they are taken into account for the purchased for resale.


Distinguishing Goods from Nontaxable Items


Since intangible and services are characteristically not taxed, therefore, the differentiation between tangible property and nontaxable service is a major source of argument. Even some courts have shed light on the importance of property with regard to the services provided. While the property is sold with a contract to offer service (it could be an extended warranty or a service contract or something else), the service agreement would usually be treated as an isolated sale if it can be bought separately.


Collection, Payment and Tax Returns


It's no wonder that the sales taxes are collected by a large number of vendors in the U.S., and the purchasers self-assess the use of taxes. States often require businesses and individuals to register with the state and this is because such people make regular sales.


All of the states that impose sales taxes want the taxes to be at least quarterly. You may also see the threshold as decided by some states in accordance with which the frequent payment is required. On the other hand, even some states offer some discount to the vendors on payment of collected tax.


Filing the tax is a must-do thing for the sellers of the taxable property with each jurisdiction they live in or are supposed to gather the sales tax. Most of the jurisdictions require the filing of sales tax every 30 days, the sellers with the minimum amount of tax due may be given a chance to file less frequently though.


Exemption Certificates:


If you have not got a certificate (or exemption certificate) for the seller showing that you've been exempted from the tax, you will be required to pay the sales tax. That exemption certificate must be approved by the state officially. In the United States (US), the Multistate Tax Commission's Uniform Sales and Use Tax Certificate have been approved by a total of 38 states. Therefore, it is your responsibility to find out what laws apply in your state and how you can be eligible for the exemption.


There are two types of exemptions that typically exist and they are entity-based and usage-based. If you would like to have an in-depth article on the difference between entity-based and use-based exemptions, please read this article (free encyclopedia). The entity entities could include different organizations, such as local, state or federal government, foreign diplomats, tribal government, religious government, non-profit organizations, etc. Furthermore, it is up to the states which type of exemption they will grant you.


Penalties:


You've probably figured it out that you're required to file sales or use tax returns and if you don't do so, you will be imposed a penalty which could be a pain in the neck for you. Therefore, the rule of thumb is that you file your tax right on time or before the given deadline. Not just that, those who are supposed to pay use or sales tax, when due, will also be subject to the fines.


The amount of penalties, if you get imposed with, will differ based on the amount of tax not paid and also vary in accordance with the rules governed by the state you are living in. So, don't get in trouble by postponing the sales tax because you're the only person who will have to pay that – on one else will do that for you.


Tax Audits:


Each year, the sales tax and use tax returns (to be paid by the taxpayers) are scrutinized with an intention to make sure that nothing is wrong with the payment procedure. During the occurrence of such inspection, the state, if required, pay put forward adjustment of the tax amount which is due.


Still, the taxpayers have the right to appeal and this varies from state to state. In some states, you will have to pay before the judicial appeal, whereas in other jurisdictions, the payment of tax an admission of the tax liability.


Constitutional Limitations:


While there is a requirement of payment of sales tax or use tax, there are some constitutional limitations. Putting different, a decision taken by the Supreme Court stated that the sellers that do not have a physical presence in the "nexus" shall not be charged by the state, for example, companies doing businesses of online shopping, main ordering, or home shopping by phone.


Some states do attempt to impose an identical per-transaction use tax instead on the consumers, however, due to the difficulty of enforcement, the compliance is comparatively low. But in June 2018, the decision was taken by the court South Dakota v. Wayfair overturned this analysis which allowed the states to charge sales tax from out-of-state merchants when the consumer is in the state.


There are some states that allow the imposition of limitations on sales tax. These limitations forbid taxing on certain items like food, for example. You can see the complete list of the items state wise on which the consumers are not required to pay taxes.


Sales Tax Variation


The amount that is taxed and what items are taxed differ from state to state or jurisdiction. Being aware of what goods are imposed a sales tax in your state or jurisdiction is highly important for your information. Also, who gets the exemption and how much do they get in accordance with the state laws.


With that in mind, we will be taking you to a straightforward and informative guide on this page that will allow you to be acquainted with the taxes applicable in each state.


Value-Added Tax (VAT):


The VAT could be considered as a variety of sales tax that is imposed by more than 160 different countries (outside of US). It is known to be an indirect tax that is charged at a different level of a product's cycle and also on service, every time the value is added.


Not just the end customer but also retailers, manufacturers, suppliers, distributors, wholesalers, etc., will be meant to pay the value-added tax which can be calculated as follows:


  • Value-Added Tax =Sales Price – Cost of Material or Parts that have already been Taxed

Goods and Services Tax (GST):


The Goods and Services Tax (a.k.a. GST) is very much similar to a VAT. In a supply chain, GST is the tax that is applied to some specific goods and services. Both of the terms i.e. VAT and GST are widely used in the countries that use these types of taxations.


The names of the countries that use GST as their sales tax include Malaysia, India, Singapore, Greece, Canada, and Spain.

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