Paying CA tax on full retail price of iPhone 4S

kbmb · Oct 11, 2011, 10:42 AM

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

NachoGrande · Oct 11, 2011, 10:43 AM

Quote:

Originally Posted by kbmb

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

Yep that's a CA law...

kbmb · Oct 11, 2011, 10:44 AM

Quote:

Originally Posted by NachoGrande

Yep that's a CA law...

Wow...that sucks. Is it just CA?

-Kevin

rdowns · Oct 11, 2011, 10:48 AM

Quote:

Originally Posted by kbmb

Wow...that sucks. Is it just CA?

-Kevin

Many threads on this. There are two other states that charge it- RI and can't remember the other.

matty.p · Oct 11, 2011, 10:51 AM

from Apple's page,

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

kbmb · Oct 11, 2011, 10:52 AM

Quote:

Originally Posted by matty.p

from Apple's page,

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

Thanks everyone!

-Kevin

Lionel Hutz · Oct 11, 2011, 11:36 AM

Does anyone know the legality of this? A sales tax imposed on an amount not included in a sale?

dukebound85 · Oct 11, 2011, 11:37 AM

Quote:

Originally Posted by Lionel Hutz

Does anyone know the legality of this? A sales tax imposed on an amount not included in a sale?

of course it is legal....

matty.p · Oct 11, 2011, 11:42 AM

Quote:

Originally Posted by Lionel Hutz

Does anyone know the legality of this? A sales tax imposed on an amount not included in a sale?

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

rgarjr · Oct 11, 2011, 11:47 AM

Quote:

Originally Posted by matty.p

from Apple's page,

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

Yep, 3 lucky states

knoxtown · Oct 11, 2011, 11:59 AM

The price we pay to live in paradise.

crunchyapple · Oct 11, 2011, 12:02 PM

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!

TypeMRT · Oct 11, 2011, 12:46 PM

Quote:

Originally Posted by matty.p

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

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.

ibazir · Oct 11, 2011, 01:14 PM

Quote:

Originally Posted by kbmb

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

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

SFStateStudent · Oct 11, 2011, 01:24 PM

California iPhone 4S 64GB purchase with tax = $849 X .0875 = $74.29 + $399 = $473.29 OTD....

mds · Oct 11, 2011, 01:25 PM

Yeah, this pisses me off every time. Maybe I'll wait till thanksgiving and buy my phone in Arizona! Haha.

outphase · Oct 11, 2011, 01:40 PM

Quote:

Originally Posted by Lionel Hutz

Does anyone know the legality of this? A sales tax imposed on an amount not included in a sale?

Well, if the tax code requires tax to be collected on original price, I would say doing so would be within the legal bounds of the tax code.

bobright · Nov 8, 2011, 11:39 AM

Is there anyway to avoid tax via online somehow?

MrXiro · Nov 8, 2011, 11:44 AM

Quote:

Originally Posted by bobright

Is there anyway to avoid tax via online somehow?

Only on eBay. I had my iPhone sent to my mom in Illinois. Even the 10 extra dollars to reship to me saves me 30 bucks. F-you California.

FreakinEurekan · Nov 8, 2011, 11:50 AM

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 · 12:03 PM

Quote:

Originally Posted by matty.p

from Apple's page,

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

all 3 left wing whack states, they would tax you to breathe if they could

jessica. · Nov 8, 2011, 11:54 AM

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 · Nov 8, 2011, 11:57 AM

Quote:

Originally Posted by jessica.

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.

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

joeshmo2010 · Nov 8, 2011, 12:02 PM

Quote:

Originally Posted by jca24

all 3 left wing whack states, they would tax you to breath if they could

Breathe* c'mon dude.

jca24 · Nov 8, 2011, 12:04 PM

Quote:

Originally Posted by joeshmo2010

Breathe* c'mon dude.

fixed, thank you for your keen eye

Oct 11, 2011, 10:42 AM	#1
kbmb macrumors 68030 Join Date: Mar 2007 Location: NH	Paying CA tax on full retail price of iPhone 4S 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 __________________ 2010 Mac Pro 2.8 Quad, 27" ACD - MacBook 2.4 GHz
	-2

Oct 11, 2011, 11:36 AM	#7
Lionel Hutz macrumors newbie Join Date: Jul 2011	Does anyone know the legality of this? A sales tax imposed on an amount not included in a sale?
	-1

Oct 11, 2011, 01:24 PM	#15
SFStateStudent macrumors 604 Join Date: Aug 2007 Location: San Francisco California, USA	California iPhone 4S 64GB purchase with tax = $849 X .0875 = $74.29 + $399 = $473.29 OTD.... __________________ MBP 2.5GHz 640GB 4GB RAM Mac Pro iPhone 4S iOS 5 Black 64GB AC+ NEW iPad Apple TV 2G
	0

Nov 8, 2011, 11:54 AM	#22
jessica. macrumors Nehalem Join Date: Feb 2005 Location: Wrong girl from the right side of the tracks	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. __________________ Because I'm an ahole.
	0

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Oct 11, 2011, 10:51 AM	#5
matty.p macrumors member Join Date: Jun 2010	from Apple's page, "In CA, MA, and RI, sales tax is collected on the unbundled price of iPhone."
	1

Oct 11, 2011, 11:59 AM	#11
knoxtown macrumors 6502 Join Date: Nov 2007 Location: Los Angeles, CA	The price we pay to live in paradise.
	1

Oct 11, 2011, 12:02 PM	#12
crunchyapple macrumors newbie Join Date: Jun 2007	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!
	0

Oct 11, 2011, 01:25 PM	#16
mds macrumors 6502 Join Date: Oct 2006	Yeah, this pisses me off every time. Maybe I'll wait till thanksgiving and buy my phone in Arizona! Haha.
	0

Nov 8, 2011, 11:39 AM	#18
bobright macrumors 68030 Join Date: Jun 2010	Is there anyway to avoid tax via online somehow?
	0

Nov 8, 2011, 11:50 AM	#20
FreakinEurekan macrumors 68000 Join Date: Sep 2011 Location: Eureka Springs, Arkansas	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.
	1

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