How is "cold hard cash" relevant to this discussion?Considering you have to pay sales tax each time you upgrade, even if you pay with cold hard cash, I'd say the "problem" is a little more widespread than financing programs.
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Warning About Apple Upgrade Program
- Thread starter MICHAELSD
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Everyone keeps saying that, doesn't make it true. Car leases are one example. Imagine having to pay the full sales tax on a 3-year lease of a $75,000 luxury car.
NA: Apple is NOT offering a lease program. It is a finance program.
Obviously, but that doesn't mean the post I quoted is true. It would be nice if they did, so we who live in a state with a high sales tax could avoid some of it.
If you are referring to sales tax on the FULL RETAIL PRICE of a SUBSIDIZED phone that would depend on the state in which you reside.
I have never paid tax on the full value of a subsidized phone only on the $199 or whatever it was I actually paid for it. Some states charge tax on the full retail list price (CALIFORNIA for one and there are a few others) but many do not. On an installment plan since you ARE ultimately paying full retail that might be true.
Up here (in Canada, eh), you don't pay taxes on a lease up front. Likely because you don't actually OWN the leased car. You pay tax on your monthly payment, which is (I'm assuming) what you're stating here. In any case, the Apple program is not a lease, so lease discussions aren't relevant.
However... If you buy that $75,000 car up front, you pay tax on the entire amount. If you trade that car back in, the dealer pays you tax back on the trade in value (I believe). So in the end, you only pay taxes on the difference between purchase price and trade in price. Theoretically, Apple COULD do the same thing, but it sounds like a headache in accounting and government jurisdictions.
However again... Lots of people sell the used car on their own, and never get that portion of their tax back. Too bad, so sad...
C
Do you pay tax on your monthly phone plan, though? In which case, you ARE paying tax on the full value... It's just not up front.
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When you trade in a card you don't actually get the sales tax back you paid you just pay LESS tax on the new car because it is cheaper because of the trade. Sounds like the same thing but it's really not.
When you trade in a card you don't actually get the sales tax back you paid you just pay LESS tax on the new car because it is cheaper because of the trade. Sounds like the same thing but it's really not.
Right... I knew it was something like that.
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Seems like if you're on this program and plan to switch to the 7 next year, you're better off getting a SquareTrade warranty that will give you a prorated refund at the end of the year based on your time left. I had a 3year ADH plan for my iPad Air, cancelled it a year later when I upgraded to the Air 2, and got a full refund.
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Posting this because some folks are unaware. That sales-tax-all-at-once requirement is actually required by the state, the vendor/manufacturer has no control over this.
I'll just slip this in here, if you do the T-Mobile Jump on Demand plan, it's considered a real lease and the sales tax is put on each payment, not paid up front. Although I find it hard to believe that the sales tax would be more than $100 on most models in most states, that would seem high. Here in Florida, for example, in the area where I live we have a pretty common 7% rate, which on say a $749 phone would be $52.43 sales tax. You would have to get the high end $949 phone with your local tax rate being over 10% to make it to 100 bucks.
Or you could have the joy of living in some areas of Canada, where the phones START at $899, and taxes can be 13%...
Of course, that's Canadian dollars, so it's only about $250US... C
I really dislike when people state their opinions as fact.
AppleCare isn't pointless. To YOU it might be but for people like myself, it's not. I have only ever had it twice. Once on my first 3G iPhone and now on my first iPhone 6S Plus. I got it for the Plus because I don't use cases or screen protectors and with the larger size, there might be a chance of me dropping it and damaging it. I wan't insurance against that so if I do, it get's replaced for a small fee. YAY!
Not everyone uses a case.
So your fact is nothing more than your opinion. The fact here is AppleCare + covers ALL accidental damage for a small fee. Everything is covered except for intentional damage. Plus an extra year of warranty if I decide to keep the phone or give it to a family member. If I sell it, it's a plus for the buyer.
Win win all around. You can go ahead and keep that great looking phone wrapped in plastic, rubber and glass and not enjoy it's true beauty.
I will keep mine free so I can enjoy it as it was made to be.
I know right? Especially that part where he said IMO.
The tax isn't the issue. It's the fact that I.e. you're paying tax on $778 when you're only paying $389 in payments. So every year you upgrade you're paying tax on $778 even though you're only making $389 in actual payments. That alone makes the program more expensive than anticipated.
But you aren't required to upgrade. You can keep the phone if you want to.
The whole draw for me and many others was the ability to upgrade annually. It still cost more than buying full price and selling but with the fact that you have to pay tax on the full amount of the device every year even if you only pay half of it off buying full price and selling is the cheaper option, hands down.
Of course it's cheaper to do that. Apple is giving you the option to trade in, that's all. You could do the upgrade program, sell in a year, then pay off the loan. In any scenario you still pay full tax every year.