Sales Tax Rates

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KWF

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If the sales tax rate on merchandise is 7%, what is the tax on merchandise that cost $1.00?
Answer: 7% X $1.00 = $0.07.

My question is as follows: Why is the sales tax called a rate? What is the other unit of measure other than 7%?
 
KWF said:
If the sales tax rate on merchandise is 7%, what is the tax on merchandise that cost $1.00?
Answer: 7% X $1.00 = $0.07.

My question is as follows: Why is the sales tax called a rate? What is the other unit of measure other than 7%?
Click to expand...
I agree with Denis (as usual but not always;)) about the rate but just another take at the 'Why is it called a rate' question: One of the definitions of rate is "a fixed ratio between two things" and you will sometimes see this as 'a xxx definition', i.e. 'a medical definition'. The fixed ratio (rate) in this case is 7% and the two things are the Sales Tax and Sales Price and the ratio is Sales Tax to Sales Price, i.e. Sales Tax divided by Sales Price = .07 or Sales Tax = 0.07 * Sales Price.

Oh, and another 'unit' might be 'parts per hundred'
 
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Ishuda said:
I agree with Denis (as usual but not always;)) about the rate but just another take at the 'Why is it called a rate' question: One of the definitions of rate is "a fixed ratio between two things" and you will sometimes see this as 'a xxx definition', i.e. 'a medical definition'. The fixed ratio (rate) in this case is 7% and the two things are the Sales Tax and Sales Price and the ratio is Sales Tax to Sales Price, i.e. Sales Tax divided by Sales Price = .07 or Sales Tax = 0.07 * Sales Price.

Oh, and another 'unit' might be 'parts per hundred'
Click to expand...


The calculation is 7% X $1.00/merchandise item (can of soup for example). The other unit of measure cannot have a dollar sign or "parts per hundred".

The only way that I can think of to give the 7% a quantity or unit of measure is to take the one from the $1.00/can of soup. So, the calculation now becomes 7%/(can of soup) X $1.00 = the tax of $0.07/can of soup. Does this idea make sense?
 
KWF said:
The calculation is 7% X $1.00/merchandise item (can of soup for example).
Click to expand...
Strictly speaking, no. "7% of" something is ".07 times".

The other unit of measure cannot have a dollar sign or "parts per hundred".

The only way that I can think of to give the 7% a quantity or unit of measure is to take the one from the $1.00/can of soup. So, the calculation now becomes 7%/(can of soup) X $1.00 = the tax of $0.07/can of soup. Does this idea make sense?
Click to expand...
 
Denis said:
...and the "not always" portion is when you're wrong :rolleyes:
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Well, not really. I remember when you said I was always right but I remember a time when I was wrong [I thought I was wrong, you see] so 'not always' is really just 'most of the time' since you were wrong when you said that.
 
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Denis said:
That should be .07 * 1.00

"rate" is just a choice of words; could be sales tax percentage, sales tax deduction....
Click to expand...



You just imagine that you're a figment.
 
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