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The final checkout price = discounted price + sales tax. Apply the discount first, then add tax on the reduced price. A $100 item at 25% off with 8% sales tax costs $81 (not $83). Discount reduces the base, then tax applies to the smaller number.
Original price $100, various discount and tax combinations:
| Discount | 0% Tax | 5% Tax | 7% Tax | 8% Tax | 10% Tax |
|---|---|---|---|---|---|
| 10% off ($90) | $90.00 | $94.50 | $96.30 | $97.20 | $99.00 |
| 15% off ($85) | $85.00 | $89.25 | $90.95 | $91.80 | $93.50 |
| 20% off ($80) | $80.00 | $84.00 | $85.60 | $86.40 | $88.00 |
| 25% off ($75) | $75.00 | $78.75 | $80.25 | $81.00 | $82.50 |
| 30% off ($70) | $70.00 | $73.50 | $74.90 | $75.60 | $77.00 |
| 40% off ($60) | $60.00 | $63.00 | $64.20 | $64.80 | $66.00 |
| 50% off ($50) | $50.00 | $52.50 | $53.50 | $54.00 | $55.00 |
Final Price = Original Price × (1 - Discount Rate) × (1 + Tax Rate)
On a $100 purchase with 8% sales tax:
| Discount | You Think You Save | Tax on Full Price Would Be | Tax on Sale Price | Actual Savings vs Full Price + Tax |
|---|---|---|---|---|
| 10% off | $10.00 | $8.00 | $7.20 | $10.80 |
| 20% off | $20.00 | $8.00 | $6.40 | $21.60 |
| 30% off | $30.00 | $8.00 | $5.60 | $32.40 |
| 50% off | $50.00 | $8.00 | $4.00 | $54.00 |
You actually save slightly MORE than the discount percentage because you also avoid paying tax on the discounted amount. A 30% discount saves you $32.40 total (not just $30) because you save $2.40 in avoided tax.
Sales tax rules vary by state, county, city, and product type. Some items are tax-exempt (groceries in many states, clothing in some states). Some states tax the pre-coupon price for manufacturer coupons. This calculator uses the standard method: discount first, then tax on the reduced price. Check your local tax rules for specifics.
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