Search All of the Math Forum:

Views expressed in these public forums are not endorsed by NCTM or The Math Forum.

Notice: We are no longer accepting new posts, but the forums will continue to be readable.

Topic: Confusion on adding percentage of cost to that cost.
Replies: 1   Last Post: Jul 12, 2005 8:10 PM

 Kevin Karplus Posts: 190 Registered: 12/6/04
Re: Confusion on adding percentage of cost to that cost.
Posted: Jul 12, 2005 8:10 PM

On 2005-07-12, ticbol <ticbol@yahoo.com> wrote:
> Taxman sees sale is \$10.58
> Taxman gets his 5.75% of that, which is \$0.61
>
> Taxman doesn't know---and he never cares---that 5.75% of \$10 was added
> to the \$10.
>
> Taxman never cares too if the original \$10 were sold at \$20. In this
> case, if sales is \$20, tax is 5.75% of \$20.

Taxes are computed differently in different countries (and even
different states in the US).

In California, the sales tax is expressed as a percentage of the price
charged *before* sales tax is added on and retailers are allowed to
advertise the price without including the taxes. Thus a \$1 item
actually costs the customer \$1.08 (if you are in a county with an 8%
sales tax rate---the rate varies from place to place in the state).
The retailer gets to keep \$1 and has to send the \$0.08 to the state.

Other places may well use a different basis for the computation, but
this is not a math question but a tax-law question.
I believe that most states in the US use the pre-tax price as the
basis, but I have not researched it other than in the states I have
lived in (Illinois, Michigan, New York, California).

------------------------------------------------------------
Kevin Karplus karplus@soe.ucsc.edu http://www.soe.ucsc.edu/~karplus
Professor of Biomolecular Engineering, University of California, Santa Cruz
(Senior member, IEEE) (Board of Directors, ISCB)
life member (LAB, Adventure Cycling, American Youth Hostels)
Effective Cycling Instructor #218-ck (lapsed)
Affiliations for identification only.

--
submissions: post to k12.ed.math or e-mail to k12math@k12groups.org
private e-mail to the k12.ed.math moderator: kem-moderator@k12groups.org
newsgroup website: http://www.thinkspot.net/k12math/
newsgroup charter: http://www.thinkspot.net/k12math/charter.html