Sales Tax Reverse Calculator ( or reverse sales tax calculator ) will help you calculate the pre-tax amount you paid for an item. It can also confirm if the sales tax on your receipt was correct. If you have the following questions, the reverse sales tax calculator provides an answer.
- How do I calculate sales tax backwards?
- How do you remove tax from the amount?
- How do you find the original price before tax?
A “Reverse Sales Tax Calculator” is useful for tax purposes because if you itemize deductions and claim credit for the overpaid local taxes and out-of-state sales taxes on your taxes. This is especially beneficial if you have to list your out-of-state purchases to your current state of residence and the taxes paid on those purchases.
Reverse sales tax calculator
A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax. Often laws provide for the exemption of certain goods or services from sales and use tax, such as food, education, and medicines. A value-added tax (VAT) collected on goods and services is related to a sales tax.Sales tax page on wikipedia https://en.wikipedia.org/wiki/Sales_tax
Sales Tax Reverse Calculator Formula
Thus you can compute the actual price and the sales tax charged on it out of a product’s post-tax price. The formula for computing the actual sales price is easy :
Pre Tax Price of Product = Post Tax Price –(Sale Price (i.e Post Tax Price) / (1 + TAX RATE))*Tax Rate
Example for Showing Method of Reverse Sales Tax Reverse Calculator
If the product is priced at, let’s say, 100 USD, then reverse sales tax works in the following way.
- Step 1: take the printed price and divide it by one plus the tax rate (100/(1+10%)=1000/11
- Step 2: multiply the result from step one by the tax rate to get the value of the tax=(1000/11)*10%=100/11
- Step 3: subtract the value of tax from step 2 from the total price= 100-(100100/110)10%=90.91 is the cost price.
Reverse tax calculation of product costing USD 100 ,based on 10% tax rate = 100-(100100/110)10%=90.909