iPhone Upgrade Program Tax Question

[kjotwani]

Have a question about that iPhone Upgrade Program Tax. So when we upgrade our phone using the Apple Upgrade program, we pay the tax for the entire device upfront.
If we return the device after 12 months and upgrade to a new iPhone, do we get a pro rated rebate or adjustment on the extra tax we paid. As we return the phone after 12 months we only use it for half the cost

Not sure if this was answered or discussed before

 

[Applejuiced]

No.
There is no adjustment or extra tax.
You have to pay full tax Every time you purchase or upgrade to a new device.

 

[kjotwani]

No.
There is no adjustment or extra tax.
You have to pay full tax Every time you purchase or upgrade to a new device.

Hmm. I understand that when you purchase the device in full u pay entire tax upfront. But specially when leasing (here the upgrade program) , the tax should be ideally on the month payments. When someone leases a car, the tax is on the monthly payments and not full upfront.
Not sure if i am missing something

 

[thekb]

I don't know how it works with the iphone upgrade program, but when you buy a car you pay tax all up front. When you buy another car and trade-in your old one, they offset the purchase price of the new car by the trade-in amount, so you only pay sales tax on the difference between the two.

 

[kjotwani]

I don't know how it works with the iphone upgrade program, but when you buy a car you pay tax all up front. When you buy another car and trade-in your old one, they offset the purchase price of the new car by the trade-in amount, so you only pay sales tax on the difference between the two.

Yup exactly. So after the trade in we pay taxes only on the remaining amount(delta). But if we have to pay the whole tax again on the new device while returning our current device then it's a waste of money just going to taxes.

 

[timeconsumer]

Hmm. I understand that when you purchase the device in full u pay entire tax upfront. But specially when leasing (here the upgrade program) , the tax should be ideally on the month payments. When someone leases a car, the tax is on the monthly payments and not full upfront.
Not sure if i am missing something

If you were leasing the phone then tax on the monthly payment would make sense. But you're not, in this case you're financing the purchase (through whatever bank Apple uses) so therefore you'd pay the tax on the full amount.

 

[kjotwani]

If you were leasing the phone then tax on the monthly payment would make sense. But you're not, in this case you're financing the purchase (through whatever bank Apple uses) so therefore you'd pay the tax on the full amount.

Got it. So this means that when I turn in the phone and upgrade, I just lose the entire tax tax money I paid? And repay full tax for the next phone?

 

[Drestin-Black]

Got it. So this means that when I turn in the phone and upgrade, I just lose the entire tax tax money I paid? And repay full tax for the next phone?

Yes.

There are different laws pertaining to trading in a car depending on the state.

http://budgeting.thenest.com/pay-sales-taxes-new-car-minus-trade-in-34188.html

When you buy a new car and trade in your old car, the amount of sales tax you pay depends on state and local sales tax rates and whether the taxable purchase price is figured before or after you subtract your trade-in allowance. Five states have no sales tax; six states and the District of Columbia tax consumers on the full purchase price of the car; and the remaining states only tax new car buyers on the price of the new car minus their trade-in allowances. Sales tax, however, is only one component of the total taxes and fees you'll pay to drive a car.

It's doubtful that any states have initiated any laws on cell phone trade in so you will pay the full tax.

 

[Applejuiced]

Hmm. I understand that when you purchase the device in full u pay entire tax upfront. But specially when leasing (here the upgrade program) , the tax should be ideally on the month payments. When someone leases a car, the tax is on the monthly payments and not full upfront.
Not sure if i am missing something

It's not a car.
It's a cell phone.
You don't get the same type of thing with tv's, laptops or any other regular sold items.