Sales tax applies when a customer purchases a product or renders a service from a retailer. Except for essential commodities like groceries and medical prescriptions, all other goods are subject to sales tax.
The tax rates differ from state to state in the US as the US does not have a national tax collecting system. Retail businesses collect these consumer taxes and pay them to the government.
If you own a business, you should be aware of the sales tax rates in your state and how to calculate sales tax. This article will help you understand sales tax when launching your business website.
Sales Tax: Through A Business Perspective
The US does not work on a national sales tax system but a state sales tax system. Each jurisdiction can decide the percentage and types of sales and use tax. The individual states decide the sales tax rates and how to calculate them.
Sales tax rates in the US range from 1.76% to 9.45%. Forty-five states in the US impose a state sales tax. Among them, 38 impose an additional local sales tax. The consumers have to pay an aggregate amount of the MRP of the product, state sales tax, and local sales tax.
To set up an online business, you need to know the various sales taxes. As a retailer, you need to collect sales tax from your customers and pay it to the governing authority in your state. The imposed tax should be added to the price of the goods. The total amount is what your customer needs to pay you.
As an online business, you need to add order forms to your business’s page so your clients can place orders online. You can purchase online order form templates for monthly or annual fees from an online order form service provider. Professional web designers create these template designs. The interactive parts of the forms are designed by converting Google Forms to Order Forms.
Calculation Of Sales Tax
Google Forms Addon provides a fantastic feature to add a sales tax calculator for every order placed by your clients. Just edit the Google Form and write a simple formula to calculate the sales tax as per the order amount. To enable this feature, one needs to install a Gsuite add-on.
Here’s how to calculate sales tax automatically through Google Forms:
If the sales tax in your state is 5%, you only need to multiply the tax rate with the order price. The CURRENCY function is used to set the currency to US Dollars. The formula you will get is:
CURRENCY(“$”, Order amount * 0.05)
Once the formula is written, the applicable sales tax will automatically be calculated. Then, write a formula to add this sales tax amount with the total price of the order. It will generate the total amount payable by the customer, including the tax.
What Are The Benefits?
Calculating sales tax automatically through your order form saves time and provides accuracy. One need not have to write a distinct block of code to calculate the sales tax for your form, as the template has already been programmed to do so. You also gain the customer’s trust for your service as the transaction is detailed and transparent.
Conclusion
Knowing the current sales tax rates in one’s state as a business owner is very important. When you launch your business online, you should thoroughly research all the various taxes and tariffs imposed on your products. It then becomes easier to calculate sales taxes on your products. Using online order form templates can be very helpful for you and your customers to save a lot of time and effort. It brings transparency to the transactions and helps your business earn the customer’s trust and respect.
