Sales Tax and Tips on Meals

Here are the facts.

q       Cowlitz County has a 7.6% sales tax on many items, including food in fast food stops
 and restaurants. 

q       One of the few places you don’t have to pay sales tax is when you purchase food
 from the grocery store. 

q       If you eat a meal at a fast food stop or a restaurant, you are asked to pay this sales tax,
 on top of the cost of the meal.  

q       A restaurant, and some fast food stops, will expect you to leave a “tip” for your wait-
person (waitress or waiter).  Tips usually run between 15% and 20% on the price of
the food BEFORE you calculate the sales tax. 

q       If you are with a large group of people, restaurants will automatically tack on a tip
 (let’s say 18%)  Leaving a tip of less than 10% is one way of telling the business that
you did not like the service.

 

Ok, let’s do some math with this information.

1.      Karen went to buy a coat at the mall.  It costs $85.50 here in Longview (Cowlitz
county).  Her friend said it was only $78.00 in Seattle (King County 8.5%)  Calculate
the cost with sales tax for each location.

 

2.      You an three friends eat dinner at The Masthead.  The meals cost $8.95 each, and the
 milkshakes cost $2.25.  Please calculate   
a) the meal,  
 b) the tip – let’s say 15%,    
c) the sales tax.
d) the total cost.

 

3.      Jeremy, wants to take his three younger brothers to Burger King, and all four of them
 have the $5.95 special.   His girlfriend wants just the two of them to go to The Brits
and have a meal for $8.50 each.  Calculate the cost of each meal option.

4.      If you total meal came to $35.75 estimate the amount of TIP you would leave, to
come close to 20%, but to make the money come out “easy” … none or very little
change handled.

 

5.      Darlene has $50 in her pocket.  She is at a nice restaurant in Longview, and expects to
 pay ABOUT 20% in tips.  ABOUT how much money can Darlene spend on her meal
 so that the combined --- meal, tax & tip come close to, but do not exceed, her
$50.00?

 

6.      Calvin says a shortcut for calculating sales tax (and getting at least really close if not
 exact) is to find 10%, then take ¾ of that.  Tell me if you AGREE or DISAGREE
with Calvin’s trick --- and give me supporting math for your position.

 

7.      I bought a latte the other day in Oregon (no sales tax) for $3.75.  I wanted to leave the
girl a tip… nothing great, but more than 10%.  What is a reasonable amount of money
 I could leave to cover the latte and the tip?  Explain your answer.

 

8.      Susan always calculates her total cost like this:     Aaron calculates his like this:
   Item Cost                                            (Item Cost) (1.076) = Total Cost
+ Sales Tax (7.6%)
Total Cost
Will both these methods work?  Please show the work for 2 different purchases, then
 make your decision.

9.      Meal = $29.75 ---- I will pay the meal, but you must pay the tax (8.4% - Tacoma) and
the tip (18%) .  How much will your portion come to?  Around it to the nearest whole
dollar.

 

10.   Angel said she could make a great dinner for four people for only $8.75 per person.  
August said that was too expensive because he could eat the family of four for $7.95
each at the local pizza place.  If there is a 20% tip expected at the pizza place, and a
  8% sales tax, which dinner idea is the less expensive?  Please show your work.