HELP: Frequently Asked Questions

More Savings Than You Thought? Here's Why..

When your calculation includes sales tax, the regular price is computed after adding the sales tax to the original price.

In most states in the United States, sales tax applies to the price after the discount is applied. We use this as our base for calculating the savings.

(Note: Some jurisdictions may calculate sales tax on the original price before applying the discount. Check the local sales tax laws for more accurate information.)

Let me explain this to you with an example.

Example Calculation:

Let’s assume that,

• Original price of the product or service = $50
• Discount percentage = 20%
• Sales tax = 8%

Okay, now let's break down the calculation step-by-step:

1. Calculate the Discount Amount:
• Discount = Original Price * Discount Rate
• Discount = $50 * 20% = $50 * 0.20 = $10
2. Calculate the Price After Discount:
• Price After Discount = Original Price - Discount
• Price After Discount = $50 - $10 = $40
3. Calculate the Sales Tax Amount:
• Sales Tax = Price After Discount * Sales Tax Rate
• Sales Tax = $40 * 8% = $40 * 0.08 = $3.20
4. Calculate the Final Price:
• Final Price = Price After Discount + Sales Tax
• Final Price = $40 + $3.20 = $43.20

Therefore, the final price of the product is $43.20.

Your Savings

Alright, next let's calculate how much you're saving overall:

Calculate the Sales Tax on Original Price:

• Sales Tax = Original Price * Sales Tax Rate
• Sales Tax = $50 * 8% = $50 * 0.08 = $4.00

Total Regular Price (without Discount):

• Total Price = Original Price + Sales Tax on Original Price
• Total Price = $50 + $4.00 = $54.00

Savings:

• Savings = Total Regular Price without Discount - Final Price after discount
• Savings = $54.00 - $43.20 = $10.80

Therefore, you are saving $10.80 in total.

This includes both the discount from the store and the reduced amount of sales tax you pay because the tax is calculated on the discounted price.