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

Back

$13.125

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If the sales tax rate is 7.25%, how much sales tax would you pay on a $100 purchase?

Back

$7.25

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

Back

$18.75

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.