The student will understand and explain the role of state
The student will create a sales tax chart by calculating the
sales tax amount and tax inclusive retail price for 20
school store items.
The student will calculate subtotals, sales tax amounts, and
total purchase amounts for multi-item sales receipts.
Connection to Bloom’s Taxonomy
- Crayons or colored pencils
- Index cards
- Sales receipts showing sales tax amount
- Worksheets for lesson plan 7 (see sidebar)
Photocopy several store receipts to share with students.
Receipts should not contain any personal information including
such as credit card numbers, and items listed should be
appropriate to share with students.
Pair students together and provide each pair with several
photocopied receipts – one from a grocery store, one from a card
shop, a clothing store, etc…. Ask students to look closely at
the receipts, and ask them what type of information is included
on the sales receipts? Create a list of student responses on the
Some possible responses may include the following:
- Name of the store
- Address of the store
- Phone number of the store
- Store number
- Cashier number or name
- Date and time of transaction
- A list of items purchased
- Price of each item
- Sales tax
- Total (including sales tax)
- Cash given
- Change received
- A tally of the number of items purchased
- Store director information
- Store hours
- Return policy
Discuss the fact that most of the information provided on a
receipt is clear to understand – the date of purchase, the list
of items purchased and prices for each, change received, and
others. However, what does the term sales tax mean? Are
any students able to explain the meaning of sales tax? Then have
the students look at their receipts one more time. Ask if the
receipts provide a percentage for the sales tax?
Explain to students that there is no nationwide sales tax in the
United States. Each state determines if a sales tax exists and
if certain items are exempt from the tax. In some states, there
may be no sales tax on unprepared food, clothing, and
prescription medications. The state of New Hampshire, for
example, does not have a sales tax. Check out an up-to-date list
state sales tax rates. This would be a great time to read aloud the R.G.’s Literary
Connection for this lesson titled
Taxes, Taxes!: Where the Money Goes by Nancy Loewen.
Exploring and Learning
Discuss with students the following basic points concerning
Taxes are collected at the federal (national), state, and
local (city or town) levels.
Taxes are collected by the government to raise revenue
(income) to provide services.
The police, fire, highway, and school departments are
examples of public services provided by and paid with tax
A sales tax is one type of tax and is calculated and
collected when people purchase items or receive certain
Explain that a sales tax is normally a percentage. It is
calculated as a percentage of the price of a good or service
and is added to the purchase price of those goods and
Provide students with the sales tax rate for your state or
another state if a sales tax does not exist in your state.
Check out an up-to-date list of
state sales tax rates. If time allows, make a transparency of the State Sales Tax
Rates from the site listed above. Discuss the difference
between the states such as exemptions, and rate differential.
Next, demonstrate to students how to calculate the sales tax:
Identify the sales tax rate in your state. Ohio’s state
tax is 5.5%, which is .055.
Multiply this percentage by the retail price of the
item(s). This amount is the sales tax.
( .055 x cost of Twister Eraser .35 = .02 )
Add the sales tax to the retail price of the item(s) to
determine the total price of the purchase.
If the sales tax is calculated and included in the price of an
item, this is called tax inclusive pricing. The tax
is already included in the price. If the sales tax is not
included in the price, but is calculated at the end when all
items are added, this is called tax exclusive.
In the United States, retailers in general use the tax
exclusive approach and do not include the sales tax in the
item’s price. However, for a school store, an inclusive price
might be easier for students and help to decrease calculation
Raymond Geddes School Store
Operating Manual outlines some basic retail principles and
states the following regarding the sales tax:
“It is the responsibility of each school store to know and
follow its state law regarding sales tax. Typically, states
require a Retail Sales Tax License. Then taxes are collected
on all sales and remitted to the state. Students can easily
create a sales tax chart to avoid mistakes. The state will
supply the necessary forms for remitting taxes. Contact your
state comptroller’s office for specific requirements.”
Pair students together and ask students to work together to
create a sales tax chart for the 20 items on the
Geddes Kit List
using the appropriate state tax rate. Instruct students to
Geddes Kit List Sales Tax Chart
by calculating the sales tax amount for each item, and the new
tax inclusive retail price for each item. Students should use
calculators for this activity. This chart can be used if a
customer purchases a single item only.
Geddes Kit List Sales Tax Chart Answer Key
as a basis for review, assuming a 5% sales tax rate.
Explain that if a school store customer purchases several
items, it is more accurate to calculate the sales tax on the
total amount of the sale rather than at the individual item
level. States may provide sales tax tables or the sales tax
amount can be calculated.
Present students with the following scenario:
RG and Hannie are working at the Raymond Geddes Elementary
School Store. Monica, Jack, Peter, Julia, and Marcus
visited the school store during lunch and bought some
items. Sniffer has asked RG and Hannie to calculate the
sales tax for the five customers in order to complete
their sales receipts.
Can you help RG and Hannie calculate the purchase
subtotal, the sales tax amount, and total purchase amount
for each receipt?
Challenge: If you run your own school store, or ran the
school in a previous Geddes lesson plan, update the sales
spreadsheet with your own sales data.
To help complete the scenario, pair students together and
provide each group with a
Sales Receipt Worksheet. Explain the following instructions, listing them on the
board or as a transparency:
- Identify the appropriate sales tax rate percentage.
- Convert the sales tax rate percentage to a decimal.
Compute the total prices for each item of the sales
receipt by multiplying the quantity sold by the item’s
- Subtotal the items purchased.
Multiply the subtotal by the sales tax rate (as a decimal)
to calculate the sales tax amount.
Add the sales tax amount to the subtotal to determine the
total purchase amount.
Ask students the following question:
What is the total amount to be reported to the state based
on the five sales receipts?
($.91 based on a 5% sales tax rate)
As a class, review the five sales receipts. Use the
Sales Receipt Key
for answers. Did any team come up with the correct total sales
tax amount to be reported to the state?
Extended Learning and Practice
Practice calculating sales tax amounts using various tax
rates. Complete the Raymond Geddes Elementary School Store
scenario using a different sales tax rate than the one used in
Using the Internet, look up “sales tax holiday.” What is this
event? Identify 5 states that offer a sales tax holiday. Check
out an up-to-date list of
sales tax holidays.
the Internal Revenue Service’s Understanding Taxes
for on-line curriculum ideas and interactive programs.
The lesson objectives can be assessed by evaluating the
Sales Receipt Worksheet
Sales Receipt Worksheet Sample Key.
Assessment of Student Progress
to assess students’ overall abilities to meet the lesson’s
learning objectives, which include understanding and explaining
the role of state sales taxes; creating a sales tax chart; and
calculating subtotals, sales tax amounts, and total purchase
amounts for sales receipts.
Provide each student with an index card and have them answer the
following questions on one side of the card:
What are two new things that you have learned?
What else would you like to learn about this topic?
On the back side of the index card, instruct the students to
draw a picture of something they learned about during this
lesson. The index cards can be hole punched and held together
with a simple shower curtain ring.