Reverse Sales Tax Calculator

Why you divide instead of subtract

Sales tax is a percentage of the pre-tax price, so the total is price × (1 + rate). Working backwards, the pre-tax price is total ÷ (1 + rate) and the tax is total − pre-tax price. Subtracting the rate from the total takes a percentage of the wrong base and always removes too much.

Example: a receipt shows $54.13 at an 8.25% rate. $54.13 ÷ 1.0825 = $50.00, so the tax was $4.13. Taking 8.25% of $54.13 instead gives $4.47 — 34 cents too much.

A $100 total in six states

Using each state’s average combined state and local rate; your actual city or county rate may be higher or lower.

Finding the rate when you know the price and the tax

If a receipt shows the subtotal and the tax but not the rate, divide the tax by the subtotal: $6.40 of tax on an $80.00 subtotal is 6.40 ÷ 80 = 8%. If you only know the total and the tax, subtract first: rate = tax ÷ (total − tax).

This is useful for checking whether you were charged the right local rate, or for working out the rate in a city you were visiting when filing an expense report.

Receipts with taxable and exempt items

Many receipts mix items taxed at different rates — groceries, prepared food, clothing or medicine can be exempt or taxed at a reduced rate depending on the state. Reverse-calculating the whole total at one rate then gives the wrong answer. Separate out the exempt items first, reverse only the taxable portion, and add the exempt items back to the pre-tax subtotal.

Common uses

• Expense reports and reimbursements that require the pre-tax amount and the tax as separate lines.
• Bookkeeping for sellers who quote tax-inclusive prices, such as at events or markets, and need to split gross receipts into sales and tax collected.
• Checking online orders. Since South Dakota v. Wayfair (2018) overruled the old physical-presence rule, states can require remote sellers to collect sales tax; South Dakota’s law covered sellers with more than $100,000 of sales or 200 or more transactions into the state a year.
• Removing VAT from UK prices. The same formula works for value-added tax: at the UK standard rate of 20%, a price of £120 including VAT is £100 plus £20 VAT, because £120 ÷ 1.20 = £100.

Rounding: why you may be a cent off

Retailers round tax to the nearest cent, sometimes per item and sometimes on the whole receipt. Reversing a rounded total can therefore produce a pre-tax price like $49.99 or $50.01 instead of $50.00. If the result is within a cent or two of a round number, the round number is almost certainly the original price.

Divisors for every state’s average combined rate

Divide a tax-inclusive total by the number in the second column to get the pre-tax price. Rates are state averages; local rates vary.