Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
WTF? Why did AT&T charge me $70 sales tax for my iphone???
- Thread starter EdwardCTV
- Start date
- Sort by reaction score
There is a difference between being "On Sale" and Subsidized.
It's an accounting thing, but basically when something is on sale, the retailer takes a loss on the mark down as they will not collect that money.
When something is subsidized, the retailer still collects the full retail value on the books. It's just differed over the life of the contract.
"Subsidized" is not the same as "Discounted" or "On Sale"
When something is "subsidized" you are paying for part of it up front and the company will pay for the rest. With cell phones, you are ultimately paying the full $700, just over the course of your contract. This is why you can negotiate a cheaper plan once your contract is up, cause you are no longer paying back the subsidy.
AT&T figures people are more likely to sign up, and even buy higher end phones if they're cheaper up front. This is a very American occurrence. If someone says "Hey, you can have this iPhone for $700 right now, and then you owe me nothing. Or I will sell it to you for $300 now and then you owe my $17 a month for the next 24 months" statistics show that most Americans will go for the $300 price, and most Europeans will go for the $700 price. This is why Americans are more in debt than any other country per capita.
All that aside, when something is on sale the company is selling it for less to liquidate inventory ... Subsidizing ( for the most part ) is a company trying to stimulate sales of a product. ( Unless the US Government gets involved ... Then a subsidy can mean anything ).
SOME STATES TAX LAWS DON'T REQUIRE A COMPANY TO CHARGE TAXES ON THE FULL PRICE WHEN THERE IS A SUBSIDY ... CALIFORNIA IS ONE OF THE HIGHEST TAXED STATES IN THE UNION. THATS WHY YOU HAD TO PAY FULL TAX. Thank Arnie.
When something is "subsidized" you are paying for part of it up front and the company will pay for the rest. With cell phones, you are ultimately paying the full $700, just over the course of your contract. This is why you can negotiate a cheaper plan once your contract is up, cause you are no longer paying back the subsidy.
AT&T figures people are more likely to sign up, and even buy higher end phones if they're cheaper up front. This is a very American occurrence. If someone says "Hey, you can have this iPhone for $700 right now, and then you owe me nothing. Or I will sell it to you for $300 now and then you owe my $17 a month for the next 24 months" statistics show that most Americans will go for the $300 price, and most Europeans will go for the $700 price. This is why Americans are more in debt than any other country per capita.
All that aside, when something is on sale the company is selling it for less to liquidate inventory ... Subsidizing ( for the most part ) is a company trying to stimulate sales of a product. ( Unless the US Government gets involved ... Then a subsidy can mean anything ).
SOME STATES TAX LAWS DON'T REQUIRE A COMPANY TO CHARGE TAXES ON THE FULL PRICE WHEN THERE IS A SUBSIDY ... CALIFORNIA IS ONE OF THE HIGHEST TAXED STATES IN THE UNION. THATS WHY YOU HAD TO PAY FULL TAX. Thank Arnie.
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.
Yup. I'm in NY, and bought an iPhone 3G in July 08. I paid $216, the $199 cost of the phone, plus county and state taxes totaling 8.625%.
This is why you should come to the UK.
I paid about $150 INC tax for my 32GB 3G S.
I get 1200 minutes a month, 500 texts, unlimited internet + wifi for about $50 a month on a 2yr plan.
.I paid about $150 INC tax for my 32GB 3G S.
I get 1200 minutes a month, 500 texts, unlimited internet + wifi for about $50 a month on a 2yr plan.
This is why you should come to the UK
I paid about $150 INC tax for my 32GB 3G S.
I get 1200 minutes a month, 500 texts, unlimited internet + wifi for about $50 a month on a 2yr plan.
$150 tax? In Canada, you can pay $12 tax for the 16gb iphone (6% tax in Alberta).
$150 tax? In Canada, you can pay $12 tax for the 16gb iphone (6% tax in Alberta).
Nooo the phone was $150 including tax
(for the 32GB)
Nooo the phone was $150 including tax
Wow that's a great deal! UK here we come!
Dude each state has their own tax laws. CA, MA, RI are the only states that charge the tax on the unsubsidized price. As to why its this for cell phones and different practice for sales on jeans...that's just the government for you! It doesn't have to make sense.
I am lost on why you continue to ask and you don't read a single reply here that would require you to navigate off the site to other sites, specifically the SBOE, and read up on your state's tax laws. I mean really? If you're going to opt to moan about something then fine but you have zero right to moan about things you don't understand when the answers have been hand fed to you. Now you just take me as an uninformed buyer who will ultimately lose in every situation because you're unwilling to inform yourself.
Read below.
Look at the receipt... he only paid tax on $29.99
Looks like an accessory of some sort.
But he paid no tax on the phone itself.
Look at the receipt... he only paid tax on $29.99
Looks like an accessory of some sort.
But he paid no tax on the phone itself.
I redact my statement.
Look at the receipt... he only paid tax on $29.99
Looks like an accessory of some sort.
But he paid no tax on the phone itself.
Exactly!
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.
You should learn about them before you post uninformed complaints about them.
In California you have to pay a monstrous tax on the full price of a subsidized phone. But then, on top of that, you get taxed up the yin yang on each monthly bill, which, in a sense, includes an installment payment toward the balance of that subsidized phone. So, in effect, you're getting taxed twice.
You can know the rules and still be angry about this.
You can know the rules and still be angry about this.
it's set up by your state leaders
look up your state tax laws simple! if you don't like the laws try to get officials that will change the laws. beyond that your stuck with your state tax laws unless you want to move. I live in Michigan as well I will gladly trade our takes laws for a better economy we have almost 20% unemployment in Michigan wanna trade.
look up your state tax laws simple! if you don't like the laws try to get officials that will change the laws. beyond that your stuck with your state tax laws unless you want to move. I live in Michigan as well I will gladly trade our takes laws for a better economy we have almost 20% unemployment in Michigan wanna trade.