We all are aware of various types of taxes in India and all over the country. there are two types of taxes direct and indirect taxes sales tax, VAT is part of it. Different companies have different sales taxes. Here in this article, we will be talking about sales taxes. By reading this article you will be well versed in sales tax. Taxes are our duty to be paid. We should follow all government rules to have a faithful and happy life.
What is the sales tax??
Sales tax is the amount of money you have to pay after checking the selling price of the goods you purchased from the market. For example, if you purchase a computer for Dollar four hundred, the selling tax for that area is around 7%. For this, you have to pay$ 28 as a sales tax. To calculate the taxes there is a Calculator available on google. The sales tax calculator will be quite an easy option to calculate the tax. With the help of a formula, you can calculate the taxes free handed.
Calculation of sales tax
Now the question arises how to calculate sales tax there are three simple steps to calculate sales tax which are as follows
- the first step is to calculate the total cost of the item.
Keep in mind to calculate the original cost of that item.
- be sure about the levy taxes of various states for different varieties of items.
- Keep in mind about your local state and city while calculating the sale taxes.
The mathematical formula for calculating taxes is A=P(1+r)100a100. Sales tax= A-P=pa 100. Here is the selling price, P is the marked price.
Examples of sales taxes
The taxes are obtained from goods like cigarettes, alcohol, phone service, medications, etc which comes under excise taxes.
Business tax calculations
The small, as well as big business, calculate taxes for their customers. Some points are as follows:-
- They first try to gather the local sales tax of that market. This includes the city and states of that market.
- Different businesses will have different taxes they merge them into a single tax. After individual observation, this tax will get a single combined result. This is also applicable to that particular city.
- They decide the item in which tax is been taxable. Make a note that every item direct taxes is not been paid. They come under indirect taxes.
- Then the taxable item goods will be calculated. It is very easy to observe that which is taxable and which is non-taxable.
- The last step is the apply the mentioned formula. The formula for how to calculate sales tax is quite easy and rememberable. This is for the customers.
The basic how to calculate sales tax is not that tough enough. It is quite easy to calculate. rate charts also available on the Internet. Various entrepreneurs and businessmen use this technique to calculate sale taxes. For further more details you can opt google which is the best thing for us in this century.