Sidebar Sidebar
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.

tax on iphone?

MSD401

MSD401

macrumors 6502
Original poster
Oct 18, 2006
284
3
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? :confused:
 
Welcome to California

Or any other state that charges crazy pricing!

%21.04 tax to be exact in California.
 
Small White Car said:
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.
Click to expand...

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.
 
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?
 
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 ;)
 
mcl said:
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.
Click to expand...
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. :rolleyes:

Of course, this also depends on your state tax rates and laws but in CA the above is certain.
 
nikhsub1 said:
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. :rolleyes:
Click to expand...

Then explain the poster above you, who DIDN'T pay tax on the full, unsubsidized price.
 
nikhsub1 said:
Of course, this also depends on your state tax rates and laws but in CA the above is certain.
Click to expand...

Noelmel said:
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?
Click to expand...

mcl said:
Then explain the poster above you, who DIDN'T pay tax on the full, unsubsidized price.
Click to expand...
You fail reading comprehension.
 
mcl said:
Then explain the poster above you, who DIDN'T pay tax on the full, unsubsidized price.
Click to expand...

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.
 
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.
 
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.
 
vpcirc said:
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.
Click to expand...

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.
 
vpcirc said:
buy it from Wal-Mart, they charged me tax on the discounted price, not the full price..
Click to expand...

Can you tell in which state did you buy the iphone at walmart and got the taxes charged on the discounted price?
 
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. :(
 
davelanger said:
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.
Click to expand...

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.
 
Purchased 3 iPhone 3G's back in 2009. Paid tax on the $199 not $499. I have a reciept.
 
nikhsub1 said:
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?
Click to expand...
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.
 
In AZ you only pay sales tax on the purchase price (what you paid at the register), not the actual value (MSRP).
 
You must log in or register to reply here.
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.
Top Bottom
Back