If you live in one of the five states (as well as the District of Columbia) that do not have sales taxes, you pay less at the register than residents of other states, especially on big-ticket items. Sales taxes are assessed on the total sale price of taxable items. If you purchase several items at once, the tax is computed on the total sale, and not on each item individually. Although there are a few factors to consider, including multiple taxes and tax-exempt purchases, the general procedure for calculating the sales tax on multiple items is pretty straightforward.
You can calculate the sales tax on multiple items by adding together their individual prices and then multiplying the total by the current tax rate.
Completing The Calculation
Add the actual sale price of every taxable item in a transaction. Multiply the sum by the tax rate. For example, a 6 percent tax rate requires you to multiply the final sale price by 0.06 to arrive at the sales tax. Round to the nearest penny. Add the tax to the sum of all the items' final sale price to arrive at the tender price. For example, items totaling $50 result in a sales tax of $3 (at 6 percent) for a final bill of $53.
Some places have several applicable sales taxes. For example, some California cities have a city sales tax in addition to the state tax. Compute each tax separately then add them to the item total to arrive at the final tender; do not compute sales tax on a total that already includes a sales tax. Each state's list of items subject to a sales tax vary. Many states do not tax food, for example.
Exemption From Sales Tax
Even states with a sales tax have some exceptions on items that can be taxed. For instance, clothing is exempt from sales taxes, particularly in states in the Northeastern United States, where heavy winter clothing is necessary for survival. While Alabama, Idaho, Kansas, Mississippi, Hawaii and South Dakota all levy general on the purchase of food, many states do tax food items at all, even if they have a general sales tax. Several states including Arkansas, Missouri, Tennessee, Utah, Illinois and Virginia still tax food items, but at a lesser rate.
It's worth noting, if you receive government benefits such as Supplemental Nutrition Assistance Program, or SNAP (commonly known as food stamps), then federal law mandates that states cannot charge sales tax on eligible food items purchased using a SNAP benefits debit card. This is regardless if your state charges general sales tax on food items or not.
- Center on Budget and Policy Priorities: Which States Tax the Sale of Food for Home Consumption in 2017?
- USDA: Supplemental Nutrition Assistance Program (SNAP)
- Colorado Department of Revenue. "Sales Tax Rate Changes." Accessed Oct. 15, 2020.
- California Department of Tax and Fee Administration. "Detailed Description of the Sales & Use Tax Rate." Accessed Oct. 15, 2020.
- Tax Foundation. "State and Local Sales Tax Rates, 2020." Accessed Oct. 15, 2020.
- Delaware Division of Revenue. "Gross Receipts Tax FAQs." Accessed Oct. 15, 2020.
- Federation of Tax Administrators. "State Sales Tax Rates and Food & Drug Exemptions." Accessed Oct. 15, 2020.
- Tax Foundation. "How Does Your State Sales Tax See That Blue and Black (or White and Gold) Dress?" Accessed Oct. 15, 2020.
- New Jersey Treasury Division of Taxation. "Salem County Sales Tax Reduced Rate Tax Filers." Accessed Oct. 15, 2020.
- Some places have several applicable sales taxes. For example, some California cities have a city sales tax in addition to the state tax. Compute each tax separately then add them to the item total to arrive at the final tender; do not compute sales tax on a total that already includes a sales tax.
- Each state's list of items subject to a sales tax vary. Many states do not tax food, for example.
Jason Gillikin is a copy editor and writer who specializes in health care, finance and consumer technology. His various degrees in the liberal arts have helped him craft narratives within corporate white papers, novellas and even encyclopedias.