How to Calculate List Price and Sales Tax from Total Amount

Step-by-Step Method:

1. Identify the known values:

   • Total price paid (including tax)

   • Sales tax percentage rate

2. Convert the tax percentage to a decimal:

   • Divide the tax percentage by 100
     Example: 7.25% ÷ 100 = 0.0725

3. Calculate the division factor:

   • Add 1 to the decimal tax rate
     Example: 1 + 0.0725 = 1.0725

4. Determine the list price (pre-tax amount):

   • Divide the total price by the division factor
     Formula: List Price = Total Price ÷ (1 + Tax Rate)
     Example: $858 ÷ 1.0725 = $800

5. Calculate the sales tax amount:

   • Multiply the list price by the decimal tax rate
     Formula: Sales Tax = List Price × Tax Rate
     Example: $800 × 0.0725 = $58

Practical Example:

You purchased a new phone with a total charge of $858 in a state with 7.25% sales tax:

1. Total price = $858
   Tax percentage = 7.25%

2. Convert to decimal:
   7.25 ÷ 100 = 0.0725

3. Division factor:
   1 + 0.0725 = 1.0725

4. List price calculation:
   $858 ÷ 1.0725 = $800

5. Tax amount:
   $800 × 0.0725 = $58

Result:

• List price (pre-tax): $800

• Sales tax paid: $58

Key Formulas:

• Sales Tax Rate (decimal):
  Tax Rate = Sales Tax Percent ÷ 100

• List Price (pre-tax amount):
  List Price = Total Price ÷ (1 + Tax Rate)

• Sales Tax Amount:
  Sales Tax = List Price × Tax Rate

Additional Notes:

• For current tax rates by state, consult official state resources or the State and Local Sales Tax Rates

• Some localities may have additional taxes – verify rates for your specific location

• Certain products may have different tax rates (e.g., groceries vs. electronics)

Reverse Calculation Verification:

To verify your calculation:
List Price + (List Price × Tax Rate) = Total Price
Example: $800 + ($800 × 0.0725) = $800 + $58 = $858

This method ensures accurate determination of both the original price and tax amount from any total purchase price.