The tax must be collected on the amount of the sale that is taxable. Taxable sales should be separated from nontaxable sales to perform this calculation. The total amount of taxable sales times the sales tax rate equals the sales tax amount.
Total Amount × 0.0825 = Sales Tax Amount
Example:
$150.00 × 0.0825 = $12.38
You may also set the sales price to include the sales tax amount. This must be clearly stated on any documents used to promote the sale.
- Sales Price (including tax) / (1 + 0.825) = Sales Price (without tax)
- Sales Price (including tax) – Sales Price (without tax) = Sales Tax Amount
Example:
- $12.00 / 1.0825 = $11.09
- $12.00 – $11.09 = $0.91
To check this calculation, multiply the sales price times the tax rate: $11.09 × 0.0825 = $0.91
If the tax on a sale is less than half a cent, no tax is collected. If the sales tax equals half a cent or more, the full one cent is collected. Sales tax on a $0.05 sale is not due because it is less than half a cent.