Paying CA tax on full retail price of iPhone 4S

Discussion in 'iPhone' started by kbmb, Oct 11, 2011.

  1. macrumors 68030

    kbmb

    Joined:
    Mar 13, 2007
    Location:
    NH
    #1
    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
     
  2. macrumors 6502a

    Joined:
    Mar 30, 2010
    #2
    Yep that's a CA law...
     
  3. thread starter macrumors 68030

    kbmb

    Joined:
    Mar 13, 2007
    Location:
    NH
    #3
    Wow...that sucks. Is it just CA?

    -Kevin
     
  4. macrumors Penryn

    rdowns

    Joined:
    Jul 11, 2003
    #4

    Many threads on this. There are two other states that charge it- RI and can't remember the other.
     
  5. macrumors 6502

    Joined:
    Jun 24, 2010
    Location:
    Portland, OR
    #5
    from Apple's page,

    "In CA, MA, and RI, sales tax is collected on the unbundled price of iPhone."
     
  6. thread starter macrumors 68030

    kbmb

    Joined:
    Mar 13, 2007
    Location:
    NH
    #6
    Thanks everyone!

    -Kevin
     
  7. macrumors newbie

    Joined:
    Jul 21, 2011
    #7
    Does anyone know the legality of this? A sales tax imposed on an amount not included in a sale?
     
  8. macrumors P6

    dukebound85

    Joined:
    Jul 17, 2005
    Location:
    5045 feet above sea level
    #8
    of course it is legal....
     
  9. macrumors 6502

    Joined:
    Jun 24, 2010
    Location:
    Portland, OR
    #9
    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
     
  10. macrumors 603

    rgarjr

    Joined:
    Apr 2, 2009
    Location:
    Los Angeles Area
    #10
    Yep, 3 lucky states
     
  11. macrumors 6502

    Joined:
    Nov 19, 2007
    Location:
    Los Angeles, CA
    #11
    The price we pay to live in paradise. :D
     
  12. macrumors newbie

    Joined:
    Jun 28, 2007
    #12
    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!
     
  13. macrumors 6502

    Joined:
    Sep 7, 2007
    #13
    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.
     
  14. macrumors newbie

    Joined:
    Mar 13, 2011
    #14
    tax on the full retail price of the phone

    yes , it is the tax law in CA , RI and MA
     
  15. macrumors 604

    SFStateStudent

    Joined:
    Aug 28, 2007
    Location:
    San Francisco California, USA
    #15
    California iPhone 4S 64GB purchase with tax = $849 X .0875 = $74.29 + $399 = $473.29 OTD....:eek:
     
  16. mds
    macrumors 6502

    Joined:
    Oct 6, 2006
    #16
    Yeah, this pisses me off every time. Maybe I'll wait till thanksgiving and buy my phone in Arizona! Haha.
     
  17. macrumors 65816

    Joined:
    Jun 13, 2009
    Location:
    Parts Unknown
    #17
    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.
     
  18. macrumors 601

    Joined:
    Jun 29, 2010
    #18
    Is there anyway to avoid tax via online somehow?
     
  19. macrumors 68030

    MrXiro

    Joined:
    Nov 2, 2007
    Location:
    Los Angeles
    #19
    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.
     
  20. macrumors 68030

    FreakinEurekan

    Joined:
    Sep 8, 2011
    Location:
    Eureka Springs, Arkansas
    #20
    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.
     
  21. jca24, Nov 8, 2011
    Last edited: Nov 8, 2011

    macrumors 6502a

    jca24

    Joined:
    Jul 28, 2010
    Location:
    DFW
    #21
    all 3 left wing whack states, they would tax you to breathe if they could
     
  22. macrumors Nehalem

    GoCubsGo

    Joined:
    Feb 19, 2005
    #22
    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.
     
  23. macrumors 68030

    MrXiro

    Joined:
    Nov 2, 2007
    Location:
    Los Angeles
    #23
    I am first adding a line to their family plan and then porting my Sprint number over. It'll be fine.
     
  24. macrumors 6502a

    Joined:
    Jun 25, 2009
    Location:
    Seattle, WA
    #24
    Breathe* c'mon dude.
     
  25. macrumors 6502a

    jca24

    Joined:
    Jul 28, 2010
    Location:
    DFW
    #25
    fixed, thank you for your keen eye
     

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