How to Apply Sales Tax

by Suzie Faloon; Updated September 26, 2017

When you are in business, you must charge sales tax for products and most services. You will be issued a business resale or resellers certificate by the state when you apply. Wholesalers cannot sell products to you without the number issued to your business on the certificate. The state you are doing business in will direct you to pay in the monies you have collected from sales tax fees, monthly, bi-monthly, semi-annually or once a year.

Items you will need

  • State reseller’s certificate
  • State sales tax chart
Step 1

Charge the customer the price for the item or service. Write it out on their bill or log it into the cash register or computer.

Step 2

Look at the sales tax chart the state issued to you. Look up the amount of the sale charge. For example, note that the sale came to $24.99. The tax will be a certain percentage of that amount. If it is 5 percent, you will charge .25 in tax.

Step 3

Add the tax amount to the bill.

Step 4

Total the amount of the sale or service with the sales tax amount for the final charge to the customer.

Step 5

Record the gross sale amount and the tax charged for each sale. Set aside the tax money to submit the payment to the state revenue service.

Warnings

  • Never include the tax as part of the cost of an item. You must detail the charge separately so that the tax amount is visible to the customer.

About the Author

Suzie Faloon is a freelance writer who has written online content for various websites. As a professional crafter and floral designer, Faloon owned a florist business for nearly 25 years. She completed the Institute of Children's Literature course in 1988.