It is no new story that America is a melting pot of diverse elements, not just do they share an influential culture with the rest of the world, but also the way domestic business and economics operate. With a selection of 50 different states to choose from, all holding its counties, districts, municipal government, and city officials, starting a new business can be somewhat tricky.

Complying with state and county regulations, while also maintaining efforts to abide by federal legislation has seen many new business owners struggle to keep track of everything they need to do before opening their doors. Sales taxes are one of the key components that many new traders struggle with, with states and cities all holding their tax rates, the efforts will seem somewhat confusing.

Calculating sales tax, how does it work?

Because different items such as food, clothing, non-essential items, liquor, non-consumables, etc. can in some cases carry its own sales tax percentage – it quickly starts to make sense why so many businesses struggle to make sense of the process. Additionally, there is also the notion that many states have four different categories of tax, including state, county, city, and district. Each of these four compartments can hold its tax percentages.

To make it easy, we can take any state, in this instance, New York. Business owners selling physical goods in any part of the state will need to calculate the sales tax on each item. For example, the Long Island city of Port Washington has a 4.0% New York State Tax, a 4.250% Nassau county tax, 0% city tax, and an additional district tax rate of 0.375%. This gives you a combined total of 8.625% sales tax which needs to be calculated on physical goods in Port Washington. This is a simple example in the state of New York, with other outlying areas having different percentages, with some going up as high as 12%.

Using a sales tax calculator

To ignore the frustration brought on by calculating sales tax on items beforehand, one can easily make use of a sales tax calculator. It is a way to make the job of calculating the final price per item a lot easier. If we take any amount for a product in Port Washington such as $2,65 before tax, use a sales tax calculator, it will automatically give you the final product price.

Basic math is not something many are equipped with and trying to work out what 8.625% of $2,65 is can become a hassle. A sales tax calculator will give the final product cost, and what the percentage of tax will be from the inserted number. In our case, $2,65 carries $0,23 total tax, bringing the final cost up to $2,88. The automation of sales tax calculators ignores the difficulty of running long sheets of data on your computer, cross-referencing the tax percentages carried in various areas of your state.

How does the tool work?

With these automated tools, you can easily find any tax rate in any city in the United States. These calculators will only require you to input the store city name and Zip Code. This will then give you a simple and easy to understand run-down of what the different tax rates will be in all four major categories (state, county, city, and district). A less complex way for small business owners to understand how tax is calculated for in-store purchasing.

On the other end of the spectrum, users can also now see the total sales tax on an item that will be purchased via the internet, mail, or phone. They can simply input the shipping city name and Zip Code. This may vary in your state, as some states have a taxation policy based on the origin of the product.

Sales tax calculation is now easier, and a lot more convenient with these types of online tools.