Adding tax and taking it back out
Adding sales tax is one multiplication: total = price x (1 + rate). Backing it out of a tax-inclusive figure is one division: price = total / (1 + rate), and the tax is the difference. The mistake to avoid is subtracting the percentage from the total. Taking 7% off a $107 total leaves $99.51, not $100, because the percentage applies to the smaller pre-tax base, not the total.
Retailers round tax to the cent on each transaction, and most states use standard rounding at half a cent. Some jurisdictions still publish bracket tables that assign a tax amount to each price range, so a receipt can differ from a straight calculation by a penny.
Worked examples
Adding tax: a $249.99 pair of headphones in a place with a combined 8.25% rate. Tax = 249.99 x 0.0825 = $20.62, so the total is $270.61.
Reverse: your receipt shows $53.94 and you know the combined rate is 6.25%, but you need the pre-tax amount for an expense report. Pre-tax = 53.94 / 1.0625 = $50.77, so the tax was $3.17. Check it: 50.77 x 1.0625 = $53.94.
This reverse mode is what you need for reimbursements, for splitting a tax-inclusive invoice, and for pricing decisions where you want a round out-the-door number. If you want a customer to pay exactly $50 including 8% tax, list the item at 50 / 1.08 = $46.30.
How US sales tax actually works
Forty-five states plus the District of Columbia levy a statewide sales tax. Alaska, Delaware, Montana, New Hampshire and Oregon do not, though many Alaskan boroughs impose a local one. The state rate is only a floor: counties, cities and special districts stack their own rates on top, so the combined rate at the register can be several points higher than the state figure. That is why this tool asks for your combined rate and shows state base rates only for reference.
Unlike European VAT, US sales tax is added at the register rather than included in the shelf price, and it is generally charged only on the final retail sale - businesses buying for resale present an exemption certificate. What is taxable varies a lot. Most states exempt groceries or tax them at a reduced rate, many exempt prescription drugs, and a few exempt clothing below a threshold. Services are taxable in some states and not others, and digital goods are a patchwork.
Two more wrinkles worth knowing. Since the Supreme Court's 2018 Wayfair decision, online sellers must collect tax once they cross a state's economic nexus threshold, commonly $100,000 in sales, so out-of-state purchases are usually taxed now. And most states run an annual sales tax holiday on school supplies, clothing or emergency preparedness items - a few days when the rate on qualifying goods drops to zero.