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Old Jun 9, 2009, 12:27 AM   #1
MSD401
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tax on iphone?

is apple's website the only one charging tax on full price of phone.. cause 40 something in tax on 199 is not correct ($199*7% RI sales tax=212.93) ... and I dont' recall my parents being charged tax on the unsubsidized price of there recent upgrades through ATT?
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Old Jun 9, 2009, 01:15 AM   #2
doubleatheman
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Welcome to California

Or any other state that charges crazy pricing!

%21.04 tax to be exact in California.
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Old Jun 9, 2009, 01:23 AM   #3
jpk32092
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You get taxed on the unsubsidized price.
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Old Jun 9, 2009, 10:28 AM   #4
mcl
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You get taxed on the unsubsidized price.
Why? That can't be proper.
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Old Jun 9, 2009, 10:34 AM   #5
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Why? That can't be proper.
Why not?

Someone has to pay taxes on the phone. AT&T says it's you. I actually can't blame them for that one.
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Old Jun 9, 2009, 10:36 AM   #6
mcl
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Why not?

Someone has to pay taxes on the phone. AT&T says it's you. I actually can't blame them for that one.
Because the purchase price isn't the unsubsidized price. Would you be ok if you walked into a car dealership, talked them down to $100 above invoice, and then had them charge you sales tax on the full MSRP of the car?

Or if you walked into a store and had them charge you sales tax on the full MSRP of any item, even though you're paying a sale price?


No, you wouldn't. It's just not done.


Sales tax in the US is a percentage of the purchase price at the point of purchase. For the subsidized 3GS iPhones, the purchase price is $199 or $299, NOT $499 or $599.
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Old Jun 9, 2009, 10:38 AM   #7
Noelmel
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I only got taxed on the purchase price. Ohio take is 6.5%. I got the $299 phone total was only $318.44 thats correct sales tax. different states have different laws. but im also a new customer...maybe that has something to do with it?
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Old Jun 9, 2009, 10:39 AM   #8
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I canceled out of ordering it online when I saw the tax, I'll pick it up in NH instead.

Maybe you should do the same if you are in RI, just keep driving and take it on a camping trip in the White Mountains to test out that new compass
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Old Jun 9, 2009, 10:42 AM   #9
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Because the purchase price isn't the unsubsidized price. Would you be ok if you walked into a car dealership, talked them down to $100 above invoice, and then had them charge you sales tax on the full MSRP of the car?

Or if you walked into a store and had them charge you sales tax on the full MSRP of any item, even though you're paying a sale price?


No, you wouldn't. It's just not done.


Sales tax in the US is a percentage of the purchase price at the point of purchase. For the subsidized 3GS iPhones, the purchase price is $199 or $299, NOT $499 or $599.
No you are wrong. The long and the short of it is that ATT is paying $699 for EVERY 32GB phone. Tax on $699 must be paid no matter HOW much they sell it to you for. If they GAVE it to you for free guess what? You would still have to pay tax on the $699. This is how it has ALWAYS worked with subsidies.

When you NEGOTIATE a lower price on a car, you did just that. You didn't receive a subsidy. With your logic someone could GIVE you a million dollar house and you would argue that you should not ever have to pay the yearly property tax? Get real.

Of course, this also depends on your state tax rates and laws but in CA the above is certain.
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Old Jun 9, 2009, 10:43 AM   #10
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No you are wrong. The long and the short of it is that ATT is paying $699 for EVERY 32GB phone. Tax on $699 must be paid no matter HOW much they sell it to you for. If they GAVE it to you for free guess what? You would still have to pay tax on the $699. This is how it has ALWAYS worked with subsidies.

When you NEGOTIATE a lower price on a car, you did just that. You didn't receive a subsidy. With your logic someone could GIVE you a million dollar house and you would argue that you should not ever have to pay the yearly property tax? Get real.
Then explain the poster above you, who DIDN'T pay tax on the full, unsubsidized price.
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Old Jun 9, 2009, 10:48 AM   #11
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Of course, this also depends on your state tax rates and laws but in CA the above is certain.
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Originally Posted by Noelmel View Post
I only got taxed on the purchase price. Ohio take is 6.5%. I got the $299 phone total was only $318.44 thats correct sales tax. different states have different laws. but im also a new customer...maybe that has something to do with it?
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Then explain the poster above you, who DIDN'T pay tax on the full, unsubsidized price.
You fail reading comprehension.
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Old Jun 9, 2009, 10:49 AM   #12
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You fail reading comprehension.
Quit trolling.

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I only got taxed on the purchase price. Ohio take is 6.5%. I got the $299 phone total was only $318.44 thats correct sales tax.
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Old Jun 9, 2009, 10:57 AM   #13
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Then explain the poster above you, who DIDN'T pay tax on the full, unsubsidized price.
Having been in the military, I've lived and bought phones in several states. There is no federal sales tax, so it's state law that determines what gets taxed - the actual $699 price you're paying before AT&T gives you $400 back for signing a contract or the $299 subsidized price. If you look on most store displays you see the full price - the subsidy = the 2Yr contract price.

Apple is located in CA which taxes the full price. The poster's state apparently taxes what you pay or the company pays taxes for their portion.

It's like buying a Mac from Apple online, where you will pay tax. Or buying it from Amazon, where unless Amazon has a warehouse in your state you don't pay tax- I don't pay tax when I buy from Amazon and I live in CA.
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Old Jun 9, 2009, 10:58 AM   #14
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Old Jun 9, 2009, 11:00 AM   #15
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Quit trolling.
Hmm, you ask a question, receive the correct answer, don't like the answer, you get corrected again and I'm the troll? LOL.
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Old Jun 9, 2009, 11:04 AM   #16
davelanger
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It is true you pay the tax on the full price.
The casheir said you will see the full price first, which I did, that was taxed, then they take off the $400 to bring it down to $199 (this was a few months ago).

Its just like having a gift card. They do all the taxes first then take off the gift card amount off that total.
Thats how it works in MA at least.
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Old Jun 10, 2009, 09:39 AM   #17
vpcirc
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Avoid the tax at Apple and ATT buy from Wal-mart

Yes, in many states Att and Apple are required to charge tax on the full price of the phone. The law does not, however, require them to pass that cost on to the customer. In the case of ATT, they make that back in the first month of service. If you want to avoid this absurd practice, buy it from Wal-Mart, they charged me tax on the discounted price, not the full price. This practice was started when Cingular originally purchased ATT several years ago. There are several pending suits against them since they do not disclose this information until after you have signed and been charged. They don't tell you up front, as many would buy the phone from a 3rd party vendor and avoid it. Hopefully the exclusivity agreements will expire, and there will be more 3rd party vendors other than Wal-Mart and choices in carriers. But then again, Apple has always been very controlling, that's why they lost the original pc-mac war, even with a superior product.
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Old Jun 10, 2009, 09:44 AM   #18
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Yes, in many states Att and Apple are required to charge tax on the full price of the phone. The law does not, however, require them to pass that cost on to the customer.
I wonder whether states charging tax on the full price also charge tax on the full price of service, part of which is "repayment" of the subsidy.
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Old Jun 10, 2010, 05:53 PM   #19
manra
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buy it from Wal-Mart, they charged me tax on the discounted price, not the full price..
Can you tell in which state did you buy the iphone at walmart and got the taxes charged on the discounted price?
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Old Jun 10, 2010, 06:00 PM   #20
Lola M
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My hubby bought $97 16GB iPhone at Walmart several days ago and paid $105 with tax so they only taxed $97.
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Old Jun 10, 2010, 06:05 PM   #21
falconman515
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California Buyers be prepared to pay full tax on the full $600 (or whichever one you get).

Its always been that way here in Cali.
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Old Jun 10, 2010, 06:32 PM   #22
Julien
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It is true you pay the tax on the full price.
The casheir said you will see the full price first, which I did, that was taxed, then they take off the $400 to bring it down to $199 (this was a few months ago).

Its just like having a gift card. They do all the taxes first then take off the gift card amount off that total.
Thats how it works in MA at least.
You ARE paying the FULL price for an iPhone. You just make a down payment and the remander is in effect paid as a part of your bill in monthly installments. Even though it is subsidized. A good analogie would be if you won a brand new Corvette. You would pay nothing for the car but would be responsable for paying the sales tax anyway.
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Old Jun 10, 2010, 06:38 PM   #23
h1w1nd
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Purchased 3 iPhone 3G's back in 2009. Paid tax on the $199 not $499. I have a reciept.
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Old Jun 10, 2010, 06:40 PM   #24
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You didn't receive a subsidy. With your logic someone could GIVE you a million dollar house and you would argue that you should not ever have to pay the yearly property tax?
A better comparison is when you win prizes on a game show, you didn't pay for them yet you still have to pay the tax. It sucks, but that is the law.
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Old Jun 10, 2010, 06:44 PM   #25
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In AZ you only pay sales tax on the purchase price (what you paid at the register), not the actual value (MSRP).
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