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Paying CA tax on full retail price of iPhone 4S

netnothing

netnothing

macrumors 68040
Original poster
Mar 13, 2007
3,806
415
NH
Buddy on mine pre-ordered the iPhone 4S on Verizon last week. He is upgrading his old LG phone on his current Verizon account....getting upgrade pricing.

He lives in California.

Verizon is charging him sales tax on the full retail price of the phone......is this correct?

-Kevin
 
N

NachoGrande

macrumors 6502a
Mar 30, 2010
986
1,714
kbmb said:
Buddy on mine pre-ordered the iPhone 4S on Verizon last week. He is upgrading his old LG phone on his current Verizon account....getting upgrade pricing.

He lives in California.

Verizon is charging him sales tax on the full retail price of the phone......is this correct?

-Kevin
Click to expand...

Yep that's a CA law...
 
M

matty.p

macrumors 6502a
Jun 24, 2010
508
277
Portland, OR
Lionel Hutz said:
Does anyone know the legality of this? A sales tax imposed on an amount not included in a sale?
Click to expand...

The difference is because the tax boards distinguish between a bundled device, and an unbundled device. When you buy a new computer for example and it's marked down from 1500 to 1000 dollars. You pay tax on the 1000. However when you're buying a phone you're also signing up for a contract that because of that contact subsidizes the price. So for an iPhone you're paying 199 for something that has a much higher value. Therefore you pay the tax on the value because of bundling. Whether or not it's fair or not is a different question, but it's definitely legal, mainly cause it is a law :p

Hope that helps
 
C

crunchyapple

macrumors newbie
Jun 28, 2007
15
0
I'm from CA and go to school in Philadelphia. This is one of the few times being in PA has paid off for me.. tax on my phone was only ~$11 vs the $59 my mom paid for hers!
 
T

TypeMRT

macrumors 6502a
Sep 7, 2007
525
130
matty.p said:
The difference is because the tax boards distinguish between a bundled device, and an unbundled device. When you buy a new computer for example and it's marked down from 1500 to 1000 dollars. You pay tax on the 1000. However when you're buying a phone you're also signing up for a contract that because of that contact subsidizes the price. So for an iPhone you're paying 199 for something that has a much higher value. Therefore you pay the tax on the value because of bundling. Whether or not it's fair or not is a different question, but it's definitely legal, mainly cause it is a law :p

Hope that helps
Click to expand...

I've purchased "Pay as You Go" phones from AT&T and sales tax is only levied in the actual sale price because there's no contract. For example, I buy the $10 refurbed Nokia phones for my dad (cheaper than insurance) and only pay $1 for sales tax even though sometimes AT&T lists the sales tax on the order confirmation page based on non-refurb price.
The carriers should be paying for the sales tax in the portion that they subsidize. But theres probably some corporate tax loophole that they're exploiting by doing it this way.
 
I

ibazir

macrumors newbie
Mar 13, 2011
3
0
tax on the full retail price of the phone

kbmb said:
Buddy on mine pre-ordered the iPhone 4S on Verizon last week. He is upgrading his old LG phone on his current Verizon account....getting upgrade pricing.

He lives in California.

Verizon is charging him sales tax on the full retail price of the phone......is this correct?

-Kevin
Click to expand...

yes , it is the tax law in CA , RI and MA
 
M

mds

macrumors 6502
Oct 6, 2006
288
0
Yeah, this pisses me off every time. Maybe I'll wait till thanksgiving and buy my phone in Arizona! Haha.
 
FreakinEurekan

FreakinEurekan

macrumors 603
Sep 8, 2011
5,550
2,609
I have to wonder if that law would stand up to a challenge. The $450 subsidy is included in your monthly telco bill, and I'm sure in California you're paying use tax on the monthly bill. That would be double taxation in my mind. But IANAL.

Be careful about shipping the phone out of state and having it re-shipped in. There was a thread here a couple weeks back about a guy who did that & the re-shipped package was lost/stolen - but his dad had only taken the default $100 insurance from UPS, so he was out a $650 phone. Re-shipping with appropriate insurance might end up costing almost as much as just paying the tax.
 
jca24

jca24

macrumors 6502a
Jul 28, 2010
825
129
DFW
matty.p said:
from Apple's page,

"In CA, MA, and RI, sales tax is collected on the unbundled price of iPhone."
Click to expand...

all 3 left wing whack states, they would tax you to breathe if they could
 
Last edited:
GoCubsGo

GoCubsGo

macrumors Nehalem
Feb 19, 2005
35,741
153
Also, VZW may also try to tell you if you have a CA number and you live in say NC that you are to be charged the CA sales tax on the phone. When I bought my iPhone I bought from Apple because while I believe VZW is wrong, they still wanted to charge the sales tax on the full price because my area code is 949.
 
MrXiro

MrXiro

macrumors 68040
Nov 2, 2007
3,850
599
Los Angeles
jessica. said:
Also, VZW may also try to tell you if you have a CA number and you live in say NC that you are to be charged the CA sales tax on the phone. When I bought my iPhone I bought from Apple because while I believe VZW is wrong, they still wanted to charge the sales tax on the full price because my area code is 949.
Click to expand...

I am first adding a line to their family plan and then porting my Sprint number over. It'll be fine.
 
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