# Calculating Total Sales – Credit & Debit in you Business

Dear M & M:

I have the total amount collected that includes sales tax collected \$11,250. How do I calculate the amount of total sales so I am not paying sales tax on sales tax?

– Doug

Dear Doug:

To calculate the sales tax that is included in total receipts for sales items subject to sales tax, divide the receipts by 1 + the sales tax rate. For example, if the sales tax rate is 7.85 %, divide the total amount of receipts by 1.0785. Using the same sales and sales tax rates this is how you would calculate sales minus sales tax collected. If the sales tax rate is 7.85%, divide the total receipts by 1.0785. Example: total sales to include sales tax are \$11, 250. When the tax rate is 7.85 per cent divide \$11,250 by 1.0785 you get \$10,431.15 or total sales minus sales tax. The sales tax to pay is simple to calculate and is a great check. Subtract total sales from the total amount minus sales tax (\$11,250 – \$10,431.15 = \$818.85). Working the problem again to check your figures sales before sales tax \$10,431.15 X tax rate 7.85 per cent would be \$818.85. Add Sales Tax \$818.85 to Sales before taxes \$10,431.15 and you will get your original number \$11250. As always check with your accountant, bookkeeper and CPA. Jeorge Bustamante from the Arizona Department of revenue is available to answer tax questions concerning sales tax in Arizona. He can be reached by calling (602) 542-8206 or calling 1-877-863-0655 or through the web site www.azdor.gov.

-M&M

Dear M & M:

Is it a good idea to use credit card debt in your business?

– William

Dear William: