Calculate sales tax by state. Add tax to a price or reverse-calculate the pre-tax amount from a total.
Auto-updated · Verified daily against IRS, Fed & Treasury sources
Enter your numbers below
A Texas-based freelance graphic designer earns $140,000 net profit/year from client work. She's evaluating whether to stay as a sole proprietor, form an LLC, or elect S-Corp status to reduce self-employment taxes.
Takeaway: S-Corp saves $8,300/year but adds ~$1,500-$3,000 in accounting fees (payroll, extra returns). Break-even is around $80-90K net profit. Below that, the overhead eats the savings. Texas has no state income tax, so the benefit is purely federal SE savings.
LLC annual fees range from $0 (Ohio) to $800 minimum (California, even for zero-revenue LLCs). Delaware C-Corp is standard for VC-backed companies but adds registered agent costs (~$300/yr) for out-of-state entities. The "best" structure is state-specific.
S-Corps cannot have more than 100 shareholders, cannot have non-US shareholders, and cannot have corporate shareholders. Violating these rules (e.g., adding a foreign investor) terminates S-Corp status retroactively, potentially creating a large unexpected tax event.
The IRS requires S-Corp owner-employees to pay themselves a "reasonable salary" before taking distributions. There is no fixed formula — the IRS looks at industry benchmarks, duties, and hours worked. Setting the salary too low is a common audit trigger for S-Corps.
Business break-even models track revenue vs. direct costs. They rarely factor in the owner's time as a cost. If you're working 60 hours/week at imputed $50/hour, your "profitable" business may be paying you $12/hour after the opportunity cost calculation.
Break-Even CalculatorA service business valued on EBITDA multiples (2-4×) gets a very different number than one valued on SDE (seller's discretionary earnings) or discounted cash flow. Buyers and sellers typically use different methods to argue their preferred price. This calculator uses a single method.
Business Valuation CalculatorBased on your inputs
8.25% combined rate
| Texas State Rate | 6.25% |
|---|---|
| Local Rate | 2% |
| Combined Rate | 8.25% |
| Pre-Tax Amount | $100.00 |
| Tax Amount | $8.25 |
| Total with Tax | $108.25 |
Reality Score:save 3 numbers across housing, debt & cash to see how your full picture holds up (0–100). One calc alone can't tell you that.
Stays in your browser. Never sent to us.
Analyze 3+ calcs to unlock your Financial Picture dashboard (cross-analysis of all your numbers).
Alaska, Delaware, Montana, New Hampshire, and Oregon have no state sales tax. Note: Alaska and Montana allow local sales taxes.
Tax Amount = Price × (Tax Rate / 100). Total = Price + Tax Amount. Reverse: Pre-tax Price = Total / (1 + Rate/100).
Combined state and local average is about 7.12%. California has the highest statewide rate at 7.25%. Local rates can push combined rates over 10%.
Most states tax goods but not services. Some states (like Hawaii, South Dakota, and New Mexico) tax most services. Check your state rules.
Use tax applies when you buy taxable items without paying sales tax, such as online purchases from out-of-state sellers. The rate equals your local sales tax rate. You self-report it on your state tax return annually.
Most states exempt unprepared grocery food from sales tax. However, 13 states tax groceries at reduced or full rates. Prepared food, candy, and soft drinks are usually taxed even where groceries are exempt.
To find the pre-tax price from a total: divide the total by (1 + tax rate as decimal). For example, a $107 total at 7% tax: $107 / 1.07 = $100 pre-tax price. The tax portion is $7.
After the 2018 South Dakota v. Wayfair ruling, states can require online sellers to collect sales tax if they exceed economic nexus thresholds, typically $100,000 in sales or 200 transactions per year in that state.
Common exemptions include prescription medications, medical devices, most groceries, and clothing (in some states). Many states also hold tax-free weekends for back-to-school shopping on clothing and school supplies.
Nexus is a sufficient connection to a state that triggers sales tax collection obligations. Physical nexus comes from having a location, employee, or inventory there. Economic nexus is triggered by reaching sales thresholds in a state.
Add Tax: Total = Price × (1 + Rate%)
Remove Tax: Pre-tax = Total / (1 + Rate%)
Every formula on this page traces to a federal agency, central bank, or peer-reviewed institution. We cite the rule-makers, not secondhand blogs.
Found an error in a formula or source? Report it →
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.