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

Back

$50

Front

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%, how much sales tax would you pay on a $50 purchase?

Back

$4

Front

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

Back

$1.50

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 does a sales tax rate of 0% mean?

Back

A sales tax rate of 0% means that no sales tax is charged on the purchase of goods or services.

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 flat sales tax and a progressive sales tax?

Back

A flat sales tax is a single percentage applied to all purchases, while a progressive sales tax varies based on the type of goods or services.