40% off means you are paying 60% of the original price ( 100% - 40% = 60%
Multiply the price of the coat by 60%:
65.00 x 0.60 = 39.00 ( sale price)
Now multiply the sale price by 1.05 ( price of coat plus tax rate) to get the final cost:
39.00 x 1.05 = 40.95
The final price is $40.95