IVA VS TAX

S.M. GALAVIZ

SALES TAX

• Equivalent to what VAT (IVA in spanish) is here in Spain
• Generally sales tax % depends on the state that you live in
• For example, the sales tax in California is 7.25%, Massachussets is 6.25% and in Arizona is 5.6%
• Usually, sales tax is not included in the price. You have to calculate the final price of a product.
• If you are buying a bottled drink, you usually have to calcualte the sales tax plus the CRV.
• CRV=California Redemption Value.
• Fee paid by the consumer for recycable containers.

Price + sales tax = final price

SALES TAX PROBLEMS

• A store is selling a water bottle for $3. If the sales tax is 7.25% and the CRV tax is 10¢, what is the final price?
• A shoe store is selling a pair of shoe for $124.99. What is the final price if the sales tax is 6%?
• A car dealership is selling a car for $45,000 what is the final price if the sales tax is 8.25%?
• You go to a restaurant and the pre tax bill is $150 for 5 people what is the final price if the sales tax is 7.25% plus a 20% tip? If you divide the bill by 5?

ANSWERS

• $3 x1.0725= $3.2175+0.10¢= $3.31
• $124.99 x 1.06= $132.48
• $45,000 x 1.0825 = $48,712.50
• $150x1.0725= $160.87x1.20= $193.05
• If divided by 5 it would be $38.61 per person.

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