How To Calculate Sales Tax - How To Find Out How Much Sales Tax - Sales Tax Calculation

In this video we discuss how to calculate the sales tax on an item. We cover the sales tax formula used and how to convert the percentage to a decimal, in order to do the calculation.



Transcript/notes
The formula for calculating sales tax on something is sales tax equals the cost of the item times the sales tax rate.

For example, let’s say that you are looking to buy a new car and your local dealership has it for $22,000. The local tax rate is 6.89%. Using the formula, we have sales tax equals $22,000, the cost of the car, times 6.89%, the tax rate. We need to convert the percent into a decimal, and to do this we by dropping the percent sign and moving the decimal point 2 places to the left to get .0689. Now, using a calculator we have $22,000 times .0689, which gives us a final answer of $1515.80.

So, the actual total cost of the car would be $22,000 plus the sales tax of $1515.80, which comes to $23515.80.

Timestamps
0:00 Sales Tax Formula
0:18 How to calculate sales tax example
0:46 Total cost including sales tax