Reverse Sales Tax Calculator

What is a Reverse Sales Tax Calculation?

A reverse sales tax calculation allows you to determine the original price of an item before tax was applied, when you only know the final price (tax included) and the tax rate. This is particularly useful when you need to separate the tax amount from a total price for accounting, reimbursement, or budgeting purposes.

The Formula

To calculate the original price before tax:

Once you have the original price, you can calculate the tax amount:

When to Use This Calculator

This calculator is useful in several scenarios:

• Expense reporting when you need to separate the tax amount
• Accounting and bookkeeping to record pre-tax amounts
• Business purchases where you need to know the tax component
• Comparing prices between tax-inclusive and tax-exclusive regions
• Calculating tax deductions or credits

Example Calculation

Let's say you purchased an item for $108 (tax included) and the sales tax rate is 8%:

• Original Price = $108 / (1 + (8 / 100)) = $108 / 1.08 = $100
• Tax Amount = $108 - $100 = $8

So the original price before tax was $100, and the tax amount was $8.

Tips for Using the Reverse Sales Tax Calculator

• Make sure you know the correct tax rate for your jurisdiction
• For multiple tax rates (state + local), combine them before calculating
• Double-check your results by multiplying the original price by the tax rate and adding it back to verify it matches the total price
• Remember that some items may be tax-exempt or have special tax rates

Common Sales Tax Rates in the US

Sales tax rates vary by location. Here are some examples of combined state and average local sales tax rates:

State	Combined Sales Tax Rate
California	7.25% - 10.50%
New York	8.00% - 8.875%
Texas	6.25% - 8.25%
Florida	6.00% - 8.50%
Oregon	0.00%