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Sales Tax on Subsidized Phone: Apple vs Best Buy vs World

urkel

urkel

macrumors 68030
Original poster
Nov 3, 2008
2,795
917
I know some people will dismiss $50 as something not worth complaining about, but this really bugs me:

Apple Store
$300 iPhone 5s 32GB (subsidized)
$ 30 Sales Tax
=$328 Total

Best Buy
$300 iPhone 5s 32GB (subsidized)
$ 80 Sales Tax
=$380 Total

Not only does Best Buy charge $800 for an unsubsidized phone ($50 more than retail) they charge sales tax on that exaggerated price?

So is charging full tax something that normal retailers do (Walmart, Target, etc) or is this a scam. Because, as someone who always bought iPhones from the Apple Store, then I feel like I was robbed $50.
 
urkel said:
I know some people will dismiss $50 as something not worth complaining about, but this really bugs me:

Apple Store
$300 iPhone 5s 32GB (subsidized)
$ 30 Sales Tax
=$328 Total

Best Buy
$300 iPhone 5s 32GB (subsidized)
$ 80 Sales Tax
=$380 Total

Not only does Best Buy charge $800 for an unsubsidized phone ($50 more than retail) they charge sales tax on that exaggerated price?

So is charging full tax something that normal retailers do (Walmart, Target, etc) or is this a scam. Because, as someone who always bought iPhones from the Apple Store, then I feel like I was robbed $50.
Click to expand...

I believe this is only happening in CA, due to some Tax law.
 
urkel said:
I know some people will dismiss $50 as something not worth complaining about, but this really bugs me:

Apple Store
$300 iPhone 5s 32GB (subsidized)
$ 30 Sales Tax
=$328 Total

Best Buy
$300 iPhone 5s 32GB (subsidized)
$ 80 Sales Tax
=$380 Total

Not only does Best Buy charge $800 for an unsubsidized phone ($50 more than retail) they charge sales tax on that exaggerated price?

So is charging full tax something that normal retailers do (Walmart, Target, etc) or is this a scam. Because, as someone who always bought iPhones from the Apple Store, then I feel like I was robbed $50.
Click to expand...

Verizon and Apple both charged sales tax on the subsidized price I paid, not on the full retail price.
 
It's also a Mass state law as well.

Not to get too political here..ha ha.

Mass and CA are VERY liberal tax hungry states!!
 
urkel said:
I know some people will dismiss $50 as something not worth complaining about, but this really bugs me:

Apple Store
$300 iPhone 5s 32GB (subsidized)
$ 30 Sales Tax
=$328 Total

Best Buy
$300 iPhone 5s 32GB (subsidized)
$ 80 Sales Tax
=$380 Total

Not only does Best Buy charge $800 for an unsubsidized phone ($50 more than retail) they charge sales tax on that exaggerated price?

So is charging full tax something that normal retailers do (Walmart, Target, etc) or is this a scam. Because, as someone who always bought iPhones from the Apple Store, then I feel like I was robbed $50.
Click to expand...

Can anyone confirm if Apple charges tax on the full price of the phone in CALIFORNIA. I know the carriers do, but if Apple doesn't, then my next upgrade is going to be at the Apple store.

Thanks :apple:
 
It depends on the law in your state. In Nevada, cellular provider stores have to tax the unsubsidized price, while ordinary retailers like Apple, Best Buy, and Walmart only have to tax the price paid.
 
sillywabbit said:
Can anyone confirm if Apple charges tax on the full price of the phone in CALIFORNIA. I know the carriers do, but if Apple doesn't, then my next upgrade is going to be at the Apple store.

Thanks :apple:
Click to expand...

Apple also charge based on the full price in CA. State law, as simple as that...
 
sillywabbit said:
Can anyone confirm if Apple charges tax on the full price of the phone in CALIFORNIA. I know the carriers do, but if Apple doesn't, then my next upgrade is going to be at the Apple store.

Thanks :apple:
Click to expand...

Yes, Apple does charge on the full amount in CA.
Try walmart, bestbuy, target, radio shack.
Those stores will only charge tax on the subsidized price like $199 plus tax for example instead of the full $649.
 
I live in Hawaii and TMO is charging the entire tax on the phone up front on top of the $99 up front payment on the iphone.
 
chabig said:
It depends on the law in your state. In Nevada, cellular provider stores have to tax the unsubsidized price, while ordinary retailers like Apple, Best Buy, and Walmart only have to tax the price paid.
Click to expand...
But that still doesnt answer why a subsidized phone in some state (NV) then Apple charges on price paid ($299) while the Best Buy down the street charges tax off full retail+ ($800).
 
In Mass, the sales tax is computers on the full price of the phone regardless of where you buy it.
 
In my opinion and I think someone should bring up the legality of charging full sales taxes on post paid cell phone contracts.

Think about this. Post paid carriers add $15-20 to your phone bill each month as part of your subsidy. And the state and city charge u taxes on your monthly bill. So in essence you are being double taxed by state of California and Mass.
 
aneftp said:
In my opinion and I think someone should bring up the legality of charging full sales taxes on post paid cell phone contracts.

Think about this. Post paid carriers add $15-20 to your phone bill each month as part of your subsidy. And the state and city charge u taxes on your monthly bill. So in essence you are being double taxed by state of California and Mass.
Click to expand...
My bill (with vzw) does not change regardless of whether I bought the phone on subsidy or paid full price (or even if I got the phone third party). So I'm not sure your logic works. They don't technically build in 15-20 dollars into the contract. The taxes that are charged on your phone bill are not sales tax per say so its a different type of tax.

I understand what you're saying but in one case you're paying taxes for a purchase and in the other case you're paying taxes for usage.
 
aneftp said:
In my opinion and I think someone should bring up the legality of charging full sales taxes on post paid cell phone contracts.

Think about this. Post paid carriers add $15-20 to your phone bill each month as part of your subsidy. And the state and city charge u taxes on your monthly bill. So in essence you are being double taxed by state of California and Mass.
Click to expand...
I was calling the government all week but nobody answered. Is it a holiday?

Anyway, this sales tax thing is exactly why I backed out of going for the Sprint OneUp program (those yearly upgrade plans). With Sprint resale value being awful then the idea of perpetually upgrading every 12mo works in a tech dorks favor... until you factor in the tax scam.

When you get your new iPhone 5s from Sprint then you pay "Zero down" but FULL tax ($80) for a phone you're only "leasing" for 12mo. And the following year you turn in that phone and pay FULL tax again ($80) for the iPhone 6. And on and on. So I decided it's cheaper to just buy at Apple and pay my $30 sales tax. And thats why I'm annoyed that I'm paying FULL sales tax ($80) at the Best Buy right down the street. It just seems crooked.
 
urkel said:
I was calling the government all week but nobody answered. Is it a holiday?

Anyway, this sales tax thing is exactly why I backed out of going for the Sprint OneUp program (those yearly upgrade plans). With Sprint resale value being awful then the idea of perpetually upgrading every 12mo works in a tech dorks favor... until you factor in the tax scam.

When you get your new iPhone 5s from Sprint then you pay "Zero down" but FULL tax ($80) for a phone you're only "leasing" for 12mo. And the following year you turn in that phone and pay FULL tax again ($80) for the iPhone 6. And on and on. So I decided it's cheaper to just buy at Apple and pay my $30 sales tax. And thats why I'm annoyed that I'm paying FULL sales tax ($80) at the Best Buy right down the street. It just seems crooked.
Click to expand...

Yep. U gotta know ur tax laws. It's a shame. Most don't.

Just like lease deals with cars. In Maryland the state charges u the sales tax on full price of the lease car (ouch) rather than the monthly sales taxes on monthly lease payments.

When I moved to Florida the state tried to charge me 6% sales taxes on my same lease that I paid the full sales taxes in Maryland. Suffice to say I never registered the car in Florida and kept our of state tags till lease ended.

The USA taxes vary from state to state.
 
As others have stated in CA you are usually charged based on the unsubsidized price of the mobile device.

What you need to look out for with Best Buy is that they are overcharging the Sales Tax on the device unless you buy it as an unsubsidized full price device. There are a few threads on this here in the forums and also one in the Best Buy Forums as well. Depending on what your local CA Sales Tax rate is you may be being hit by ~2% additional Sales Tax on what you should be paying.

You should be able to get the Sales Tax adjusted based on others experiences either by calling Best Buy or going in to a store and having a Manager do an override adjustment. Anyone in CA should be looking at their receipt and verify that they are not being overcharged.
 
CA law is the same

In CA the law is, the tax is charged on the sales price of the item not including any incentives. It should be the same at ANY RETAILER, either AT&T, Verizon, Sprint, or an Apple Store. If someone was charged 380$ for a 32GB phone at a BEST BUY, they were overcharged about 20$.
 
should be based on the state, one of them is doing something wrong, prob not properly configured system.
 
State tax law ...you buy the 16gb phone at $199 and they tax you on the 649 price.
I've always paid about $60 in taxes every time I get a new phone
 
Mixedcreation said:
Depending on what your local CA Sales Tax rate is you may be being hit by ~2% additional Sales Tax on what you should be paying.
Click to expand...

I live in California and last year I got my iPhone 5 from Apple and my friend got his iPhone 5 from Best Buy and he was charged almost $20 more than what I paid for no reason, I told him to say something but he refused (I even had my receipt that was emailed to me on my phone and I showed him the difference).

I haven't shopped at Best Buy in years, plenty of cheaper places to go other than Best Buy.
 
Sales tax in California

As someone previously stated, tax law is tax law. EVERYONE purchasing a subsidized Iphone will pay sales tax on the FULL retail.

You may be able to save a couple of bucks if you purchase the phone in a different city as rates of tax can vary a little bit.

Anyone who thinks that they are not paying tax on the full retail price is just plain wrong.

The fact that BestBuy, Wallmart, Radio Shack and the like have reduced the price of the 5c by $50 or so....just know that they are effectively paying the sales tax for you.
 
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