Page 48 - Calculating Agriculture Cover 20191124 STUDENT - A

4-10 Percentages, Ratios and Relationships CH 4]

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Example B: A hardware store sells power drills at 29 / 2 % more than its cost. If their
model cost $76, What is the selling price of the power drill?

Solution: Selling Price = Cost + (Cost x Increase as a decimal)

Selling Price = $76 + ($76 x 0.295)
= $76 + ($22.42)
= $98.42

OR

Selling Price = Cost x (1 + Increase as a decimal)

Selling Price = $76 x (1 + 0.295)
= $76 x (1.295)
= $98.42

Taxes & rates on sales, luxury, excise, property, and Income
Benjamin Franklin was correct when he penned “...but in this world nothing can be said
to be certain, except death and taxes.” And everybody pays taxes of some kind all of the
time.
All municipal, county, state, and federal taxes, which include sales and excise taxes,
whether paid directly or indirectly are paid by the ultimate consumer of goods and services.
When taxes are levied before the goods arrive at the store, the customer pays for these taxes
as they are included in the sale price of the good. When someone says that they want
business or the wealthy to pay “their fair share”, the ‘fair share’ is never defined and
whatever that ‘fair share’ is, it is incorporated into the purchase price of the goods
consumers buy... always. When State legislatures levy a tax on goods, that tax is always
passed onto the consumer in the form of higher prices for which the tax collection agency’s
are happy to receive. These taxes are usually collected by the retailer and forwarded to the
proper governmental agency.
All individuals and corporations pay a percentage in taxes on the cost of those goods and
services, and these taxes apply to many different kinds of situations. The most common
types of taxes collected are sales tax, luxury tax, excise tax, property taxes and income taxes
which are discussed in this chapter.

SALES TAX and LUXURY TAXES
Sales Tax: A sales tax is a government levy or special fee that is usually calculated as a
percent of the selling price paid for by the consumer and collected by the seller. The
ordinances and laws regarding which sales are taxable and which are exempt from taxation
vary from one state agency to another. For example, food sold to individual consumers is
exempt from sales tax in some states but not in others. Sales tax rates also vary from state
to state and from city to city. The seller, therefore, must know the sales tax laws of each
taxing agency that are applicable to their business.
Sales tax is a tax on retail purchases. It is used to pay for state and local budget items
like schools, roads and fire departments, roads and road repair. Sales tax is a consumption
tax, and is generally charged on the sale of products between retailers and the individual
consumer. The retailer collects sales tax on consumer purchases and forwards those tax
dollars to the state revenue offices.
Many consider sales tax to be regressive, as it is a larger burden and a greater
percentage of income from low-income earners. The only federal sales tax was imposed in
2010 via the health care reform law (Obama Care) which taxes a 10% federal sales tax on
indoor tanning services.
Sales tax rates (percentages charged) varies throughout the nation. Let’s look at
Palmdale, Ca; Seattle, Wa.; Kansas City, Mo.; Kansas City, Ks, and Washington D.C.

The combined sales tax rate for Palmdale, Los Angeles County, California, is 9.5%. The State

Mathematics is made of 50 percent formulas, 50 percent proofs, and 50 percent imagination.

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