Introduction to Sales Tax for Kids and Teens
This video explains the concept of sales tax in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about sales tax, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What is Sales Tax
- How is Sales tax calculated
- Different sales tax rates within a state
- What is the average sales tax rate
- How does Sales tax impact you
What is Sales Tax?
Sales tax is a tax charged whenever goods or services are sold. The seller collects sales tax from the buyer, and then gives it to the government.
How is Sales tax calculated?
Sales tax is represented as a percentage of the purchase price. It is calculated by multiplying the price of goods or services with the sales tax rate.
The sales tax rate varies by state and also depends on the type of goods or services.
So, every place within a state has the same sales tax, right?
No. Local governments can charge extra sales tax above and beyond what the state charges. This means that you will not only have to pay the base sales tax of your state, but also any extra sales tax added on by local governments.
For example, if the state sales tax was 5%, and the local government charges a 2% sales tax, you would end up paying a total of 7% sales tax.
What is the average sales tax rate?
The state sales tax rate in the US, not counting any additional sales tax imposed by the local government, usually ranges from 4 to 7 percent.
Many states have exemptions on certain items like groceries, or prescription drugs.
And some states, like Alaska and Delaware have no sales tax whatsoever!
How does Sales tax impact me?
Since most of the time sales tax is not included in the price of an item, you need to account for it separately when planning a purchase – especially for big ticket items.
For example, an $800 phone will actually cost you almost $100 more when you account for sales tax.
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: What is Sales Tax
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you need to know about sales tax: What is Sales Tax, How is Sales tax calculated, Does every place within a state have the same sales tax, What is the average sales tax rate, How does Sales tax impact me, and more.
Show notes and transcript at: https://www.easypeasyfinance.com/sales-tax-for-kids-teens-beginners/