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BestBuy may be overcharing sales tax for Californians - check your receipts.

C

Calbear88

macrumors member
Original poster
Sep 21, 2013
30
4
Hi Guys, I ordered an iphone 5S online on September 20th with in-store pickup and was charged an incorrect amount of tax.. The full price of the phone at bestbuy is $799.99 and the tax tax rate in my city 8%. I was charged $70.71 in tax, which is $6.72 too high. I called best buy customer support and they refunded the overcharge for me.

A few other Californians have posted in another best buy thread about being overcharged, but that thread is 21 pages long already and I think this issue deserves its own thread. https://forums.macrumors.com/showthread.php?p=17974914

Be sure to check your receipt, because it may be a bug in the bestbuy ordering system.
 
Interesting, thanks for the heads up.

They charged me 0.875% on $699 retail price 16GB ($61) and the same % on $799 retail price 32GB($70).
 
They sure are over charging and I added comments as well in that other thread.

If you want to see an example of what is taking place go to there online site and price out a 5c with a package and at the Replacement (Phone only) price.

When you go on to their site and try to price out a 32GB 5c bundled with a plan you get $68.92tax vs. one that isn't on contract or considered a replacement that comes up as $63tax which end up being a $5.92 difference at a 9% rate. Not sure what they are doing, but they do appear to be overcharging on sales tax in CA.

It should also be noted that they are charging sales tax based on a retail price that is $50.99 higher then any other carrier or retail outlet. The 5s 64GB unsubsidized price is $899.99 at BB vs. $849 at most everywhere that I've checked. This leaves one over taxed on that extra base retail difference as well.
 
Calbear88 said:
Hi Guys, I ordered an iphone 5S online on September 20th with in-store pickup and was charged an incorrect amount of tax.. The full price of the phone at bestbuy is $799.99 and the tax tax rate in my city 8%. I was charged $70.71 in tax, which is $6.72 too high. I called best buy customer support and they refunded the overcharge for me.

A few other Californians have posted in another best buy thread about being overcharged, but that thread is 21 pages long already and I think this issue deserves its own thread. https://forums.macrumors.com/showthread.php?p=17974914

Be sure to check your receipt, because it may be a bug in the bestbuy ordering system.
Click to expand...

I think the better question is why is Best Buy charging $50.99 more than Apple for the phone.
 
jmann said:
This is standard practice. In LA and NY you must pay sales tax on the full unsuvsidizes price. Even if you buy through the carrier or apple store you will pay this tax. It is unfortunately the law.
Click to expand...

Maybe that's what happened last week. We bought a crib and had a 20% off coupon. Tax came to 11.25 percent. I know its 9% here. Did we maybe get charged tax for the full price?

Also explains my $67 tax on $299 on my 5s.

Got my 5s at apple store btw.
 
Last edited:
user-name-here said:
Because they can. They know it's popular and people will buy them regardless so why not make a little more than the MSRP apple gives?
Click to expand...

I don't think its allowed though. I've spoken with a few Best Buy managers in the past about why they charge $19.99 for a cable over $19 like Apple and its because they have the ability to charge X% more for the product to make a small profit. I don't think $50.99 falls in this small percentage that is allowed.

Manufactures set the minimum and maximum a product can be sold at and this is the first time Best Buy is charging this much more for the device, I think they are testing the waters which is not right to customers.

OP: You could probably get them to price match Apple and get $50.99 back.
 
Mlrollin91 said:
I don't think its allowed though. I've spoken with a few Best Buy managers in the past about why they charge $19.99 for a cable over $19 like Apple and its because they have the ability to charge X% more for the product to make a small profit. I don't think $50.99 falls in this small percentage that is allowed.

Manufactures set the minimum and maximum a product can be sold at and this is the first time Best Buy is charging this much more for the device, I think they are testing the waters which is not right to customers.

OP: You could probably get them to price match Apple and get $50.99 back.
Click to expand...

MSRP = Manufacturers Suggested Retail Price.

Retailers can charge whatever they want above MSRP as there is no maximum whatsoever. If anything Apple wants prices for their products to increase as long as it doesn't affect sales (which it won't in the case of the iPhone, as most buy via 2-yr subsidy which the price increase doesn't affect) since that increases profits and the idea that Apple products are premium products.
 
jmann said:
This is standard practice. In LA and NY you must pay sales tax on the full unsuvsidizes price. Even if you buy through the carrier or apple store you will pay this tax. It is unfortunately the law.
Click to expand...

This is true for CA that you are required to pay sales tax on the unsubsidized price of the phone in a bundled transaction.

Not sure about NY myself, but doing a quick look on the BB site comparing a replacement phone vs. one with a new plan for zip 10007 it does appear that they are only charging sales tax at rate of a little over 9% for the replacement 5c 32GB phone at $699.99 = $62.12 Sales Tax vs one on a Verizon plan $199.99 = $17.75 Sales Tax. Doesn't appear to me that NY is as bad as CA but there are some extra pennies being taken there as well.
 
yes, bestbuy's off contract price is higher. The 32GB 5s is $749.00 at apple but $799.99 at bestbuy. However, I was charged the wrong amount of tax on the best buy off contract price.
 
user-name-here said:
MSRP = Manufacturers Suggested Retail Price.

Retailers can charge whatever they want above MSRP as there is no maximum whatsoever. If anything Apple wants prices for their products to increase as long as it doesn't affect sales (which it won't in the case of the iPhone, as most buy via 2-yr subsidy which the price increase doesn't affect) since that increases profits and the idea that Apple products are premium products.
Click to expand...

Depending on the company, there is a maximum of what a retail store can charge for a product. Starting back in 2012, Samsung and Sony set maximums on what their TVs can be sold for. They also set minimums for what their TVs can be sold for. Its called the MRP/MAP model. Though it is not very common in the United States, it still exists.

The only reason why I know this is because I was good friends with a couple Best Buy and Frys Electronic managers. And if I recall correctly, they all said Apple sets both a minimum and maximum for what their products can be sold for.
 
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