Is there a dollar amount that, when adding Massachusetts Sales Tax, precisely equals $200?

Question

I am confused about calculating Massachusetts Sales Tax (6.25%). Is there such an amount, that when added to its sales tax, equals $200? The reason I ask is because my business has been charging $200 for things and we said tax was already included. How do I reconcile this?

Answer 1

Total including tax = Sales price + (Sales price * tax rate)

Total including tax = Sales price * (1+tax rate)

$200 = Sales price * (1+.0625)

$200 = Sales price * 1.0625

$200/1.0625 = Sales price *(1.0625/1.0625)

$188.24 = Sales price

You are charging $188.24 for the product + $11.76 ($188.24 * 0.0625) in sales tax.

Answer 2

Hello and yes, the formula for this is 200 / (1 + .0625) = 188.24

Reconcile:

Tax = .0625 * 188.24 = 11.76

188.24 + 11.76 = 200

Please let me know if I can be more helpful, thanks!

Joe