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.

Front

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

Front

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

Back

$1.50

Front

If the sales tax rate is 10%, how much sales tax would you pay on a $500 purchase?

Back

$50

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).

Front

What is a sales tax rate?

Back

The sales tax rate is the percentage at which sales tax is charged on a purchase.

Front

Why do governments impose sales tax?

Back

Governments impose sales tax to generate revenue for public services and infrastructure.

Front

What is the difference between a fixed sales tax and a percentage sales tax?

Back

A fixed sales tax is a set amount added to the purchase price, while a percentage sales tax is a variable amount based on the purchase price.