US Pricing provided by Apple is BEFORE TAXES

Discussion in 'Community Discussion' started by cgc0202, Mar 21, 2016.

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  1. cgc0202, Mar 21, 2016
    Last edited: Mar 21, 2016

    cgc0202 macrumors newbie

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    #1
    [This issue is a common misconception from people from other countries when they compare US Prices, e.g., published by Apple, with those charged for the same product in their respective countries. This is true not only for Apple products but also for all other goods and services sold or charged to customers in the US.



    I am not an economist, and the purpose here only is explain and perhaps reduce the same questions asked, in regard the pricing of products in the US vs. the comparable product price in the respective countries of the various inquirers.]



    It is true that many products in the US may be cheaper than in other countries and there are many reasons for this, but beyond the scope of this post. However, the published priced of a product (in this case, those of Apple) in the United State, IS NOT the TOTAL PRICE because different states or some localities have differing state or even additional city or county local taxes. [In contrast, in many other countries, the published price may already include the VAT "tax" — this would explain in part the seemingly higher prices charged in other countries wrt Apple pricing in the US.]



    First. Some states don't have local SALES tax at all; thus. for these states, the Apple.com price will be the same as the total sale price. [For this reason, some people in MA who live near New Hampshire (NH) will go to NH because the state does not impose any STATE sale tax. However, no one from Boston would go to NH to buy Apple products there because of the extra cost and time involved.] Nevada also does not have a STATE sales tax. So, tourist to the Casinos may take the opportunity to buy stuff when in Las Vegas.


    Some cities or counties will charge the standard State Tax that average from 5-10% of the price, while some cities or counties may charge additional city or county taxes, but the total seldom exceed 10-15%.



    In Boston, MA, there is no SALES tax for certain necessities (e.g., clothing, food??, etc.) up to US$200??? per purchase and MA even has a Tax free holiday each year. The STATE sales tax for other items was 5% but this was increased slowly during the past few decades to 6.25% -- much, much lower than the VAT taxes and other taxes in many other countries, especially in Europe and Canada***. For this reason, many visitors in Boston from other countries visit the Apple Boylston Store in Boston to buy Apple products. [http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/salesuse-tax-guide.html]



    Second. Currency fluctuations. Following the economic and stock market crash in 2008 and the subsequent worldwide economic instabilities since then, currency exchange rates have been fluctuating wildly worldwide. In fact, many "speculators" (individuals and institutions) have analyzed these currency fluctuations to make profit from these instabilities. Some earned billions and billions, although others lost in these speculative venture.



    Companies, like Apple that, that have substantial income from other countries, try to protect from these wild variations in currency values by buying insurance. But last year, in spite of their insurance, were it not for Apple "losses" from foreign currency fluctuations, Apple would have exceeded the "analysts expectations" for the "1st Quarter of 2016". To mitigate these "currency fluctuations losses", Apple has been very severe in its mark ups (wrt to the US Dollar) of Apple products in many other countries worldwide.



    Third. Value Added Taxes. It is political suicide to raise taxes in the US at the federal and local levels. Further, what is called "trickle down economics"*** - lowering income, dividend and capital gains taxes for the rich and corporations with the expectation that those "savings from lowered taxes will then be invested to uplift the plight of the whole country -- has been the mantra for many decades now in the US.



    Should you buy your Apple Products in the US? You may be able to do that, especially the iPhone, provided you take into consideration the added cost for purchasing and shipping products from the US to your country, plus additional insurance cost, if needed and the possibility of the other charges that may be levied for goods purchased from abroad. This is a common practice though among visitors coming to the US whose fare is covered by other legitimate travel activities, or those who are willing to purchase the product for family or friends.



    ________

    ***This did not work out as well as desired so that budget deficits at the federal level were curtailed by decreasing the funds allocated for many social services. State and local communities (cities and counties) relying heavily on these federal funds) may have resorted to levying or increasing taxes or other fees at the local level to compensate for reduced federal funding. [Other states and communities opted to abolish many social programs instead.] States with other more stable sources of income, tend to avoid increasing local sales taxes.



    Because these sales taxes are decided at the state and local level, there is no uniform "sales tax" among the 50 states in the US. As a result, pricing for goods and services, is not included in published prices, and added only after the purchase has been made.



    Prices of Goods and Services in the US vs. Other Countries. In contrast, in many countries, especially in Europe, the published price of goods and services usually include the value added tax (VAT) and other fees???. For a number of reasons, the VAT is much much higher in other countries compared to the local state and local taxes in the US.



    CGC
     
  2. spyguy10709 macrumors 6502a

    spyguy10709

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    #2
    Great but maybe a bit politically charged with the whole bit about "trickle down economics". Not sure it's needed.
     
  3. AutoUnion39 macrumors 601

    AutoUnion39

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    #3
    Uhh... I live in Boston.

    I know so many people who have driven up to Nashua to buy MacBooks, iPhones, Costco trips, and electronics.
     
  4. Zenithal macrumors 68040

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    #4
    It's to be expected. If I have to order some thing pricey, I get it from a reputable company outside of California's jurisdiction. I love my state as much as the next guy, buy paying several hundred in taxes is a joke when a tiny fraction of that tax goes to schools and public roads.
     
  5. cgc0202, Mar 22, 2016
    Last edited: Mar 22, 2016

    cgc0202 thread starter macrumors newbie

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    #5
    Thanks, I stand corrected. When I was new in Boston, I was surprised when I met some New Yorkers buying cloths while on a visit in Boston. I was made aware of the tax disparities among the different US states and even cities.

    What I stated above is more for a single purchase, e.g, the iPhone SE, at a time. A US$500 iPhone SE would be taxed for under US$32. For many residents in Boston, without a car, it will cost more for the transportation plus the added time to travel to and from Boston to New Hampshire (NH). Of course, if you have other reasons for the visit (doing other shopping, pleasure trip of the family) or spending quite a sizable amount for several Apple products, then that would be a good rationale, as you stated, especially if you have a car.

    If I am not mistaken, by law, we are supposed to declare any purchases made out of our state or through the internet and pay the corresponding local and state taxes. *grins* I am not sure many Americans follow this rule.

    Considering that our taxes in MA is very low at 6.25% (in spite of its being denigrated as "Taxachusetts"), and some goods not taxed at all below a certain amount per purchase, I tend to make most of my purchases locally if there is not much price difference. Sometimes, I could make a deal (e.g., to lower the price). I take advantage also of our Tax free weekend, if I can schedule a big purchase

    Books, and other items, I also buy locally to help the business in the community, instead of sending my money to Amazon.

    CGC
     
  6. rhett7660 macrumors G4

    rhett7660

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    Sunny, Southern California
    #6
    Are you referring to taxes being collected by company's who do not have a physical presence in a location?

    http://www.nolo.com/legal-encyclopedia/50-state-guide-internet-sales-tax-laws.html
     
  7. A.Goldberg macrumors 68000

    A.Goldberg

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    Location:
    Boston
    #7
    Same. I actually bought an expensive watch in New Hampshire to save a couple hundred bucks in taxes over Massachusetts. About 45min North of Boston you have Salem New Hampshire- full of stores (especially tobacco stores) where everything is cheaper due to lower taxes.

    Everyone was pretty pissed in Connecticut when Amazon decided to build a distribution plant in CT as then then the physical location added taxes to all products purchased from Amazon to CT residents.
     
  8. AutoUnion39 macrumors 601

    AutoUnion39

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    #8
    Yup, we don't have sales tax on clothing here (as you said above.) Makes perfect sense to come here and buy clothes, especially if you're buying expensive items.

    Zipcar. You can go to Nashua and back in about ~2 hours. That should cost you around $20/30 or so for the trip.

    Of course, if it's just a cheaper item, there's no reason to go up north, but for a $2500+ Macbook, it's worth it. You also don't get taxed on AppleCare there.
    --- Post Merged, Mar 22, 2016 ---
    I think Amazon charges sales tax for us now? Especially with their new same-day delivery service?
     
  9. h00ligan macrumors 68030

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    Apr 10, 2003
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    A hot desert
    #9
    You should have left the opinion piece out of it and left it at , hey unlike the Europe and vat tax isn't included wnd varies.


    Plus you missed a big part of this. It's really easy to say if I competed my money and bought there it would be so cheap. It's not,fair etc etc. I hear this from my family back home in the uk ALL the time. The failure here is in not recognizing that your annual,earnings converted to usd is not representative of your potential earnings for that job in the USA nor considerate of the multitude of expenses not supplied by the federal,government.


    A discussion if saving money buying one time in the USA really need only consider the price and online purchasing rarely indices tax. Those who gauge Apple prices as a cost of living and value of true earnings by running their annual,salary through a currency converter are missing a massive point.


    For a single purchase you need to consider warranty though I personally have had apple s service thinks in the uk bought in the states as have family members. Practically speaking you want the box, mail it to yourself. If you go through customs with a new lei duct bid you're going to pay import tax. Personally I'd leave the box out. But if you must, use usps and ship it, it will cost less than import tax.

    If you pack an iMac in you're luggage either way you're paying tax.


    Excuse any typos, and sorry but I have to say for those who don't know us economics please do ignore the comments in the op,regarding trickle,down and other oversimplifications seemingly opined form someone with a low overall understanding of economics.im not sure why half that stuff was added As a) at best as stated its oversimplified b) at worst its compete,y wrong c) it's an opinion which has almost nkthing to do with the topic at hand.

    D) read an economics blog if you want to learn about the USA and global economy.
     
  10. cube macrumors G5

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    May 10, 2004
    #10
    Online stores should be made to charge tax like everybody else, but it needs to be easy to implement, without abusing the customer.

    And eBay and Amazon Marketplace are just the Wild West.
     
  11. maflynn Moderator

    maflynn

    Staff Member

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    Boston
    #11
    As others stated, so many people do drive up to NH, heck there's an Apple store in Salem NH, so its not a huge time investment from Boston.
     
  12. balamw Moderator

    balamw

    Staff Member

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    New England
    #12
    MOD NOTE: Thread is politically charged, but the OP does not have the right to participate in discussion in PRSI. So we are closing the thread.

    B
     
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