Sales tax is calculated on the discounted price, not the original price. The store first applies the discount to reduce the price, then calculates tax on the lower amount. This means you pay less tax on discounted items, which is an added benefit of buying on sale.

Sales tax rates vary by state, county, and city in the United States. You can look up your combined rate on your state's department of revenue website or check a recent receipt from a local store. Some states like Oregon, Montana, and Delaware have no sales tax at all.

The difference is sales tax being added on top of the discounted price. For example, a $200 item at 20% off costs $160, but with 8.5% tax added, the final total is $173.60. Always factor in your local tax rate to know the true cost before heading to the register.