Sales tax is a tax charged on products from end users. It is imposed by government of a state or country and is a percentage of the cost. Sales taxes are varying from country to country and even differ in cities of a single state. Some countries avoid imposing sales tax on food products but in restaurants sales taxes are charged on it. Services are exempted from sales taxes as well as some exemptions are also given to certain customers or on a specific group of merchandise.
With advent of technology it becomes very easy to calculate sales tax. There are some specific calculators also available on internet in which you just have to put total price and percentage of sales tax. If you are not having access to such sites, you can also calculate it with simple calculator. Find out your area’s sales tax. You can easily get access to it because federal tax administration has details of taxes of every state and city. Sales taxes are calculating in percentage. For example a 5.50% sales tax means the amount of tax per one dollar is 5.50 cents.
For example, the cost of a product is 40.99 and the sales tax of your area for that particular commodity is 5.50%. You can get retail price of a commodity by simply multiplying 40.99 by 5.50 and then divide by 100 you will get your tax on that product, and to find total cost multiply 40.99 by 1.055.
The reason of sales taxes is to manage whole nation by stabilizing financial resources. The revenue generated from sales tax supporting the financial condition of a country. Government then use these taxes for the welfare of public like using the revenue in healthcare sector, national defense, social security, free elementary education, public housing and lots of other social programs.
Sales taxes are easy to collect as compare to income tax. Many of people are suggesting that countries should just impose sales taxes due to its fair collection. No matter what is your gross income? If you are purchasing certain commodity you have to pay sales tax.