# Math Equation to Calculate Sales Tax

by Peter Welch ; Updated September 11, 2015In the United States, a sales tax is often tacked onto a sale as a percentage of the purchase price. The sales tax is a state rather than federal tax. As of January 1, 2012, the only states without a sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon. California’s statewide sales tax of 7.25 percent is the highest in the nation.

## Calculating Sales Tax

To calculate the sales tax owed on an item, first change the sales tax percentage to a decimal by moving the decimal point two places to the left (for example, 5 percent to 0.05, 7.5 percent to 0.075, 8.25 percent to 0.0825) and then multiply the price of the item by this figure. That is, S = I * T, where S = the sales tax owed on an item, I = the price of the item and T = the statewide sales tax as a decimal.

## Example #1

Question: Frank buys a new skateboard in Cheyenne, Wyoming, for $50. Wyoming has a 4 percent state sales tax. How much sales tax must Frank pay on his purchase? Answer: First, convert 4 percent to a decimal by moving the decimal point two places to the left. 4 percent = 0.04. Then, multiply the price of the item ($50) by this decimal. 50 * 0.04 = 2 Therefore, Frank must pay a $2 sales tax on his purchase.

## Example #2

Question: Utah has a state sales tax of 5.95 percent. Charlotte buys a book in Utah for $20. How much sales tax does Charlotte owe on her purchase? Answer: First, convert 5.95 percent to a decimal by moving the decimal point two places to the left. 5.95 percent = 0.0595. Then, multiply the price of the item ($20) by this decimal. 20 * 0.0595 = 1.19 Therefore, Charlotte owes 93 cents in sales tax on her purchase.

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