Page 49 - Calculating Agriculture Cover 20191124 STUDENT - A

CH 4] Calculating Agriculture 4-11

levies a 6% sales tax and a 3.25% ‘special tax’. Los Angeles County levies a 0.25% tax and the City
of Palmdale’s tax is 0.00%. The merchants in the city boundaries collect a total of 9.5% on the sale
of goods. If you purchase $100 of goods in the city of Palmdale then your sales tax is (0.095 x $100
=) $9.50. Your total checkout sales will be ($100 + 9.50 =) $109.50.

In the city of Seattle, Kings County, Washington, the sales tax rate is 10.10%. The state of
Washington levies a 6.5% sales tax and Kings County bills 3.6%. In Seattle, when you purchase
$100 of goods your sales tax will amount to (0.1010 x $100 =) $10.10 and this amount is added to
your purchase. At the checkout you will hand over ($100 + $10.10=) $110.10 for your goods.

Kansas City is a city divided by the Missouri River, and geographically in two states; the city being
in two states is actually two cities with two separate city councils and tax rates.

Kansas City, Jackson County, Missouri Sales Tax Rate is 8.6%. The Missouri State Sales tax is
4.225%, Jackson County Sales tax is 1.25%, and the city tax is 3.125%. When purchasing $100 of
goods in Kansas City, Mo., the sales tax will be ($100 x 0.086 =) $8.60 added to your bill. At
checkout you will pay a total of ($100 + $8.60=) $108.60.

For the city across the wide Missouri river, the combined sales tax rate for Kansas City, Wyandotte
County, Kansas is 9.125%. This is the total of state, county and city sales tax rates. The Kansas
state sales tax rate is currently 6.5%. The Wyandotte County sales tax rate is 1%. The city tax is
1.625%. When you purchase $100 of goods in Kansas City, Ks., your sales tax will be ($100 x
0.09125 =) $9.13, the rounding up rule applies on this purchase. At checkout you will pay a total of
($100 + $9.13=) $109.13.

Washington D.C. has a sales and use tax rate of 6% for general goods purchased. It also has a
10% liquor tax for off-premise use and on-premise consumption, and for restaurant meals and rental
vehicles. It has an 18% tax for commercial parking lot spaces rented, and a 14% tax rate for hotels
and transient (people who are traveling) accommodations. You rent a parking stall for your work at 4
$325 per month. The tax on you parking stall is 18% per month of the rent you contract for. The tax
you pay on your parking stall is ($325 x 0.18 =) $58.50. Your total monthly payment of rent and tax is
($325 + 58.50 =) $383.50.

The sales tax rate is applied to the total amount of a sale rather than to the individual
articles in the sale unless the sale is composed of taxable items, special taxed items and non-
taxable items. Special taxed items include cigarettes and alcoholic beverages and are listed
separately. Non-taxable items include food and labor for a persons services. Labor for services
are paid as state and federal income tax by the laborer.

Sales tax may be calculated with the following equation:

Sales x Sales Tax Rate = Sales Tax

Example: Using the sales tax rate of 9%, calculate the sales tax on a retail purchase
totaling $141.28.

Solution: Taxable Sale x Sales Tax Rate = Sales Tax
$141.28 x 9% =
$141.28 x 0.09 = $12.72 (Rounded to the nearest cent)

Adding the calculated sales tax to the retail purchase equals the total retail payment. In
the above example this is:

Sales Tax + Retail Purchase = Total Retail Payment
$12.72 + 141.28 = $154.00

The sum total of all sales tax collected is remitted to the states treasurer for the designated
use as established by the states legislature.

Some business owners do not keep separate records of sales taxes collected rather opting to
keeping only a total of sales generated which included total retail purchases plus the sales tax
collected with each sale. The sales tax liability for the business is computed, reported and
remitted to the state treasurer monthly or quarterly as stipulated by the state’s law.

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