sales tax calculator
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How to use the Credit Karma sales tax calculator
Thanks to sales tax, whether you’re shopping for something at the store or paying for a service, the final cost is likely to end up higher than what’s on the price tag. If you make your purchase in a state, county or municipality that charges sales tax, this additional charge typically shows up on the receipt or bill.
Our sales tax calculator can help you determine how much the sales tax is in your area, so you can get a better idea what the final purchase cost may be.
To use the sales tax calculator, you’ll have to enter the following information:
- Your city
- ZIP code
- Price before tax
Keep in mind that the sales tax calculator only provides an estimate based on the information you provide. Your actual final sales total could be affected by other variables like additional taxes or service fees.
This field is optional, but ideally you’d want to enter the city where you plan to make your purchase.
For the state, input the state where the transaction will be completed.
Input the ZIP code of the town or city where you’re buying the item or service.
Price before tax
This is the price of the product or service that you may see on the price tag, menu, etc.
How to calculate sales tax
Sales tax is calculated as a fixed percentage of the cost of goods or services you buy. Then it’s added to your final bill. Before tax is added, you might see the purchase price listed as “subtotal,” then a line for “taxes,” followed by the “total.”
Our sales tax calculator helps you determine what you can expect to pay in state and local taxes, if any, as well as the final cost of your purchase.
If you already know the rate and prefer to do the math yourself, you can use this simple formula:
[(Price of the item) x (Percentage as a decimal)] + Price of the item = Total cost
Let’s look at an example.
Let’s say you’re shopping in Collingswood, New Jersey, and you’re planning to make a $10 purchase. The tax rate for a purchase here is 6.62%.
[($10.00) x (.06625)] + $10 = $10.66
Using the above formula, the sale tax is $0.66. You’ll be charged a total of $10.66 at checkout.
What is sales tax?
Sales taxes are added to most retail goods and services, with the exception of groceries, by some state and local governments. The money collected from sales taxes typically goes toward funding important public services and projects like education, parks and public safety initiatives.
With the exception of just five states — Alaska, Delaware, Montana, New Hampshire and Oregon — all states in the U.S. and Washington, D.C., charge sales tax. And while there’s no state sales tax in Alaska, local sales taxes can be collected. Plus, there are 38 states where local sales taxes are collected on top of a state sales tax.
When do you need to pay sales tax?
While sales taxes can apply to many of the purchases you make, not all goods and services are taxed. And even then, it can vary, depending on where you’re buying something.
Let’s take a closer look at some of the common categories.
Taxes on clothing purchases vary from state to state and can depend on whether the item you’re buying is considered essential or how much you spend. In the state of New York, for example, clothing and footwear that costs under $110 per item is exempt from state, local and metropolitan commuter transportation district taxes. But in Minnesota, clothing for everyday use is exempt, while accessories, sportswear and protective equipment aren’t exempt.
In many states, groceries are exempt from sales tax. But of the 45 states that have a statewide sales tax, there are 13 states that charge sales tax on grocery sales. But states that charge sales taxes on groceries may do so at a reduced tax rate.
Whether medication is exempt from sales taxes is usually based on whether the medication is sold via prescription or over-the-counter. Prescription medications are tax exempt in 44 of the 45 states that charge sales tax. But you can usually expect to pay sales tax on over-the-counter medications like pain relievers or allergy pills.
Items bought online, over the phone or by mail are typically subject to sales tax. But who gets charged may depend on the location of the business and where the purchaser lives. And it can vary from state to state.
Sales-tax-free shopping holidays
Some states hold annual sales-tax-free shopping days or weeks for things like back-to-school or emergency preparedness shopping. For example, in Connecticut, the tax-free week is held in August. Items such as clothes and footwear are exempt from taxes as long as they cost less than $100. During the sales tax holiday in Florida, school supplies are exempt from taxes.
Preparing to pay sales tax
Paying sales tax is unavoidable in most states for most purchases. If you itemize deductions on your federal tax return, you may be able to deduct some of the sales tax you paid throughout the year. Consider talking to a tax professional about your options. And if you don’t already have a budget, putting one together may help you manage expenses. Check out our guide to budgeting.