Sales Tax Flashcard

Front

What is sales tax?

Back

Sales tax is a percentage of the purchase price that is added to the total cost of goods and services, collected by the seller and paid to the government.

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How do you calculate sales tax?

Back

To calculate sales tax, multiply the purchase price by the sales tax rate (as a decimal). For example, for a $100 purchase with a 5% sales tax, the calculation is $100 x 0.05 = $5.

Front

If the sales tax rate is 6.5%, how much sales tax would you pay on a $75 purchase?

Back

$4.88

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If the sales tax rate is 5%, how much sales tax would you pay on a $30 purchase?

Back

$1.50

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If the sales tax rate is 7.5%, how much sales tax would you pay on a $250 purchase?

Back

$18.75

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If the sales tax rate is 6%, how much sales tax would you pay on a $80 purchase?

Back

$4.80

Front

If the sales tax rate is 8.75%, how much sales tax would you pay on a $150 purchase?

Back

$13.125

Front

What is the formula for calculating total cost including sales tax?

Back

Total Cost = Purchase Price + (Purchase Price x Sales Tax Rate) or Total Cost = Purchase Price x (1 + Sales Tax Rate).

Front

What does it mean if a sales tax rate is expressed as a percentage?

Back

It means that the tax is calculated as a portion of the total purchase price. For example, a 10% sales tax means you pay an additional 10 cents for every dollar spent.

Front

Why do governments impose sales tax?

Back

Governments impose sales tax to generate revenue for public services such as education, infrastructure, and healthcare.