Sales tax
Add or remove US sales tax with state and local rates stacked. Unlike discounts, tax rates add — 6.25% state plus 2% local is 8.25%, not 8.375% — and the tax is charged on the discounted price, not the list price.
| Component | Rate | Tax on this sale |
|---|---|---|
| State rate | 6.250% | $15.56 |
| County / city rate | 2.000% | $4.98 |
| Combined rate | 8.250% | $20.54 |
| Taxable amount | — | $249.00 |
| Gross payable | — | $269.54 |
| Effective tax on gross | 7.621% | Always below the combined rate |
Rates stack by addition — a 6.25% state rate plus a 2% local rate is 8.25%. That is the opposite of how stacked discounts behave.
c = state + local · rates add, they do not compound
G = N(1 + c) · tax-exclusive input
N = G/(1 + c) · division, not subtraction
c/(1 + c) · = 7.62% here
A clear path from inputs to results.
US sales tax is a stack of state, county and city rates that add together — the opposite of how discounts behave. This engine adds or extracts tax at a combined rate and shows how much each jurisdiction receives.
How to use
- Enter the amount.
- Set the state rate and the combined county and city rate.
- Choose whether the amount already includes tax.
- Read the net, the tax and the gross.
- Check the jurisdiction split if you need to record the liability by authority.
The formula
Reference: State revenue codes; Streamlined Sales Tax sourcing conventions.
Worked example
$249 purchase at 6.25% state plus 2% local
- Taxable amount $249.
- State 6.25%, local 2%.
- Amount excludes tax.
- 1
Combined rate: 6.25% + 2% = 8.25%.
- 2
Tax: 249 × 0.0825 = $20.54.
- 3
Gross: $269.54.
- 4
State share: 249 × 0.0625 = $15.56; local share: 249 × 0.02 = $4.98.
- 5
Tax as a share of the gross: 20.54 / 269.54 = 7.62%, not 8.25%.
$20.54 of tax on $249, $269.54 total, split $15.56 state and $4.98 local.
Interpreting the result
The effective rate on the gross is always lower than the stated rate, because the rate is defined on the net. Removing tax from a gross figure therefore requires division by (1 + c), not subtraction of c — the error at 8.25% is about 0.6% of the net, small but systematic across thousands of transactions.
Assumptions & limitations
- One combined rate applies to the whole amount. Mixed baskets with exempt items need per-line treatment.
- Sourcing follows the rate you enter; interstate sales may be sourced to a different jurisdiction.
- No exemption certificates, resale certificates or reduced categories are applied.
- Tax is rounded to the minor currency unit at the transaction level.
Frequently asked questions
Do state and local rates compound?
No, they add. A 6.25% state rate plus a 2% local rate is 8.25%, not 8.375%. That is the opposite of how stacked discounts work.
Which state has no sales tax?
Five states have no statewide sales tax, though some allow local taxes. Rates and exemptions change, so confirm with the state revenue department before invoicing.
How do I reverse sales tax out of a total?
Divide by (1 + combined rate). At 8.25%, $269.54 / 1.0825 = $249.00. Subtracting 8.25% of the gross would give $247.30, which is wrong.
Does the tax apply to shipping?
It depends on the state and on whether shipping is separately stated. Many states tax delivery when the goods are taxable.
Methodology last reviewed 2026-10-18. Results are informational and not financial or engineering advice — see our disclaimer.