# How to Multiply Sales Tax

Sales taxes are added to the cost of purchases.

Sales taxes are imposed by state and local governments as a means to raise revenues. Sales taxes are a type of consumption tax because the tax applies only to purchases. According to Money Zine, sales taxes make up about 25 percent of state and local government revenues. The amount of sales tax is determined by the sales tax rate and the size of the purchase.

## Step 1

Add all applicable sales taxes together to find the total sales tax rate. For example, if you have a city sales tax of 3.1 percent and a state sales tax of 5.4 percent, you would add 3.1 to 5.4 to get a total sales tax rate of 8.5 percent.

## Step 2

Divide the total sales tax rate expressed as a percentage by 100 to convert it to a decimal. In this example, you would divide 8.5 by 100 to get 0.085.

## Step 3

Multiply the sales tax rate expressed as a percentage by the purchase price to calculate the sales tax. Finishing the example, if an item cost \$330, you would multiply \$330 by 0.085 to find the sales tax, which would be \$28.05.

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