Adding and Removing Sales Tax
Adding tax is easy; removing it is where most mistakes happen. Because the tax was applied on top of the net price, you must divide — not subtract a percentage:
Gross = Net × (1 + rate) Net = Gross ÷ (1 + rate)
Example: an item costs $107.99 including 8 % tax. The net price is 107.99 ÷ 1.08 = $99.99 — not 107.99 × 0.92 = $99.35, which would be wrong.
US Sales Tax vs. European VAT
- United States: No federal sales tax. Combined state + local rates range from 0 % (Delaware, Oregon, Montana, New Hampshire) to over 9.5 % in parts of Louisiana, Tennessee and Washington. Shelf prices are shown without tax.
- Europe: VAT is included in displayed prices. Standard rates run from 17 % (Luxembourg) to 27 % (Hungary); Germany 19 %, Italy 22 %, France 20 %.
When You Need the Reverse Calculation
Backing tax out of a gross amount is a daily task for freelancers writing invoices, shops doing bookkeeping, and travelers reclaiming VAT. Enter the gross price, choose "Remove Tax", and the calculator splits it into net price and tax amount.