Sales tax is the money paid to a government for the sales of some goods and services. In some countries, sales tax is referred to as value-added tax or (VAT).
Importance of Sales Tax
Sales tax is important to each state as it is a mechanism used to generate income for the state. At the same time, it tracks sales for each business.
Formula
Sales Tax = Cost Price x Rate
Example
Suppose you buy a car for 20,000 dollars and pay 5% in as tax. Therefore:-