WTF? Why did AT&T charge me $70 sales tax for my iphone???

Discussion in 'iPhone' started by EdwardCTV, Aug 4, 2009.

  1. EdwardCTV macrumors newbie

    Jun 22, 2009
    i called in to figure out why on my banking statement AT&T charged me around $370 for my 32gb Iphone

    the woman who i spoke to said the extra 70 dollars is from taxes and she reasoned that the tax is based on the fact that the retail price for the iphone is 700+? WTF?!

    thats b.s.! what store is selling the iphone for 700? the 300 is the retail price for the iphone right? and even if 300 is the discounted price (which im pretty sure it isnt since thats the same price the apple store is selling it for without any discount whatsoever) ive never heard of paying tax for the full retail prce.

    for those of u who ordered from AT&T how much were u taxed for ur iphone?
    im on hold for a supervisor right now this is ridiculous!
  2. SFStateStudent macrumors 604


    Aug 28, 2007
    San Francisco California, USA
    That's standard practice when dealing with subsidized phones. You are actually paying taxes for the full amount of the 3GS iPhone. My tax was about $64.66....
  3. manueld macrumors 6502

    Jun 8, 2009
    They charged you properly. The $300 price is not a "discounted" price. It's a subsidized price. Your paying for the retail price which is $699. Everyone who got the subsidized price paid as much as you did. So simmer down.
  4. aprofetto macrumors 6502a


    Dec 19, 2008
    Hamilton, Ontario
    I think you may be a bit confused.

    The Apple store does not sell them at $299 retail.

    These bad boys do retail for $599/$699 (16gig/32gig) with no-contract extension. Or at a subsidized price of $199/$299 with the renewal of contract.

    That being said, I still don't know why or if they're supposed to charge the tax on the full retail price if they're giving it to you for the subsidized price.
  5. tjp888 macrumors regular


    Oct 29, 2007
    Yup, I was charged tax for the FULL price of the phone. I purchased a Palm Pre 2 weeks before from Sprint and was also charged sales tax for the full price of the phone.
    So, this isn't just AT&T.
    I don't know what your sales tax rate is, but where I live (in the SF Bay Area) it is 9.75%! (thank you Gover-Nator).
  6. Camaro6700 macrumors member

    Nov 12, 2008
    I bought my 16gb from an Apple store and the total price was only 214.52. 199 for the phone and 15.52 for tax at 7.8%. I don't know why you all had to pay the full price.
  7. optophobia macrumors 6502a


    Oct 26, 2007
    Hudson MA
    And change your title. You only got charged $70 tax not $700
  8. -aggie- macrumors P6


    Jun 19, 2009
    Where bunnies are welcome.
    You got to love the OP titles that are SO misleading. You didn't get charged $700 in taxes. Please change the title.
  9. thegoldenmackid macrumors 604


    Dec 29, 2006
    dallas, texas
    This is what everyone gets charged, why you needed to be transferred to a supervisor for this is puzzling.
  10. SFStateStudent macrumors 604


    Aug 28, 2007
    San Francisco California, USA
    Hey OP, you might want to NOT yell at the supervisor; just apologize and hangup. I've been there and done that back in 2008, no one won in that situation either....:eek:
  11. nparmelee macrumors 6502

    Jan 23, 2008
    Some states require sales tax on the unsubsidized price, from
    "In CA, MA, and RI, sales tax is collected on the unbundled price of iPhone."
  12. EdwardCTV thread starter macrumors newbie

    Jun 22, 2009

    lmao sorry guys i was typing it with one hand on the keyboard and the other holding my phone

    i tried to go back and re-edit the title it wont let me
  13. rjohnstone macrumors 68040


    Dec 28, 2007
    PHX, AZ.
    It depends on what state you live in. In AZ you are only charged tax on the actual purchase price paid, not the full retail value.
    My $199 phone cost me $216 after taxes. That's right.. only $17 sales tax. :D
  14. tivoboy macrumors 68030

    May 15, 2005

    that is the way it works in SOME states, as the countless posts from day one will show.
  15. EdwardCTV thread starter macrumors newbie

    Jun 22, 2009

    can someone who is familiar with CA tgaxes clarify why is it that when you purchase something "on sale" or whatever promotion/discount it is that u get on any random misc goods at a retail store you are taxed on the selling price not what the original price of the good is selling for? ie if i buy a pair of jeans that are on sale for $100 with an original retail price of $500 they only tax me on the sale price.

    does saying that a price is subsidized as opposed to sayin its on sale make it so that they can still tax you on the original price?
  16. mkrishnan Moderator emeritus


    Jan 9, 2004
    Grand Rapids, MI, USA
    Edward, I fixed the title for you. For future reference, to change your thread title, click the EDIT button on your original post, then click Go Advanced, and change the post subject in Advanced mode. When this is done on the OP the thread title changes also.

    That's really interesting... the last phone I bought was my refurb iPhone (2G), which was not subsidized (right?), but I didn't remember paying tax against the unsubsidized price on previous phones -- most of the time, back then, the unsubsidized price was not even published. Then again I have not lived in any of those states. I wonder when they began that practice?
  17. EdwardCTV thread starter macrumors newbie

    Jun 22, 2009
    i didnt yell at anyone i questioned the tier 1 support agent calmy and respectfully and then she offered to let me speak to the supervisor

    :p i hung up and called it a day and stopped waiting after i read some of the replies in this thread.
  18. mrkgoo macrumors 65816

    Aug 18, 2005
    Subsidized means someone else is paying for the rest of the price. In the case of the iPhone, the phone is $700, you pay $300, AT&T pay $400. You pay all the tax.

    Go Oregon for no Sales tax :D
  19. EdwardCTV thread starter macrumors newbie

    Jun 22, 2009
    thank you and i agree interesting subject to say the least. ...

    especially the subject of what superficially appears to be inconsistent forms of taxing (in california) ....

    u are taxed on the full price of something if it is 1.) free 2.) subsidized?

    yet when something is on sale or at a discounted price you only pay taxes on the actual selling price?
  20. EdwardCTV thread starter macrumors newbie

    Jun 22, 2009
    interesting and yes go oregon! lol :( next time i make a big purchase i will be sure to buy it when im in oregon haha

    what about when a retailer absorbs profit loss from putting things on sale?
    why are you then only taxed on what you actually paid for?
  21. GoCubsGo macrumors Nehalem


    Feb 19, 2005

    In short, all you need to know is in CA, MI, and RI you will pay tax on the unbundled price.
    Why? Read here. And though this is not Apple's fault, earlier it was said that Apple was misleading customers when they technically (imho) weren't. Anyone with any experience buying a subsidized phone from AT&T in CA or any carrier would know this. I've paid tax on the full price of phones since I could remember in CA.

    Links are to the State BOE, AT&T Wireless forums, and some dude's blog.
  22. alansaysstop macrumors regular

    Apr 11, 2009
    it's a California tax stipulation that states you must pay taxes on the full retail price.
  23. EdwardCTV thread starter macrumors newbie

    Jun 22, 2009
    well obviously i was not aware of this at the time. u live and u learn. people arent born out the womb knowing everything there is about tax laws. but now i know. :D
  24. alansaysstop macrumors regular

    Apr 11, 2009
    I live in MI and paid taxes on $199.
  25. mrkgoo macrumors 65816

    Aug 18, 2005
    Remember, taxes go to the government. It's completely separate to profit.

    When a retailer sells something, even on sale, that's the tax - tax on the sale. Get it? Sales tax.

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