Comments on: Suboptimal Retail Experience — Apple iPhone 3G Sales Tax Overcharge

By: Trenton Cai

Trenton Cai — Sat, 24 Apr 2010 16:13:11 +0000

AT&T unquestionably has control of the market with the iPhone and that’s what SHOULD be looked at…not Apple. Do you suppose Apple really worries whether Google offers Google Voice on its platform…. as long as individuals are purchasing their phones – and they’re purchasing these life-changing gimmicks! I love mine! The dropped phone calls are one too numerous (AT&T), but the phone is brilliant! One thing I wish it would have got is Flash to play videos from certain internet sites!

By: Eric

Eric — Wed, 24 Jun 2009 20:35:53 +0000

The subsidy is different than when you buy a can of soup at the grocery store for 20% off. When you buy the can of soup, the grocer has decided to accept a lower margin on the soup, but isn’t paying anyone else.

In the case of this subsidy, AT&T actually does pay the subsidy amount to Apple (regardless of whether you buy the phone from an Apple store or an AT&T store).

By: Mario

Mario — Wed, 24 Jun 2009 14:28:19 +0000

In the Apple store in Palo Alto I was charged $64.66 sales tax for the 32GB iPhone ($299). I also found it surprising, then what else is a subsidized price then a discount? Or is this in the future going to be the way stores go to just say “the unsubsidized price is 500 instead of 50 on those pants, that’s for what you have to pay sales tax”
For me it looks like a hidden way to make money and claim the overcharge of being a sales tax.

By: Eric

Eric — Mon, 22 Jun 2009 22:14:47 +0000

Paul,

I agree that the general state of affairs with taxes in the US and CA is terrible, but the sales tax on the iPhone isn’t actually any worse than on anything else. It’s just confusing that they don’t make it clear that the purchaser is paying the sales tax on the total price of the iPhone including the AT&T subsidy.

In general, I am of the opinion that a sales tax is far better than an income tax. For example, the FairTax proposal.

Eric

By: paul

paul — Mon, 22 Jun 2009 21:50:58 +0000

I was just about to call them. $299.00 and $61.16 in CA sales tax. Not only is it immoral but it is criminal in my opinion. If anyone is interested in taxes in general… I encourage you to google “freedom to fascism” It’s a documentary by Aaron Russo the producer of Trading Places with Eddie Murphy and Dan Akroyd. It’s a history of how the income tax came about in this country. I think you would all be surprised to find out that we didn’t always pay taxes on our labor. You can watch for free.

I had no intention of saying that but it seemed fitting since this particular iphone tax is hilarious and sad. Think of $40 times how many iphones they sold. More revenue for the state to waste and less money in your pocket, as usual…

regards,

campaignforliberty.com

By: Eric

Eric — Sat, 20 Jun 2009 00:05:31 +0000

Suppose you went to buy a phone for $299, and some random stranger that happened to be in the store offered to pay $200 of the price for you. Should the state then decide that you only have to pay tax on $99 instead of paying tax on $299? Should the state force the generous stranger to pay the sales tax on the $200 he’s paying?

Of course, AT&T isn’t a generous stranger. They’re paying part of the cost of the phone because you’re signing a contract with them. But even though you’re paying $99, the fact remains that the phone is being sold for $299 and so the state expects to collect sales tax on $299.

I’m not saying I like it, but it does make sense and it’s not a matter of AT&T or Apple trying to screw the customer.

By: LRich

LRich — Fri, 19 Jun 2009 23:58:06 +0000

You should only have to pay tax on what the price is not what it use to be.

By: Shane

Shane — Fri, 19 Jun 2009 19:24:26 +0000

I don’t quite see what the complaint is. You’re getting the phone at a price discounted hundreds of dollars. This seems like people wanting to have their cake and eat it too. The phone costs $499, AT&T is just agreeing to pitch in to help you pay for it, but the tax is still on you, since you’re buying the thing.

By: LRich

LRich — Thu, 18 Jun 2009 21:32:13 +0000

Amit
don’t bother buying the iPhone in Nevada. I was also over-charged by the AT&T store. The purchase price was $99 but I paid tax on $499. I believe I should have been charged $7.75, but I paid a whopping $44.49. I complained to AT&T, APPLE, and I am in the process of trying to connect with the State of Nevada Taxation. I was thinking of contacting the local TV station that handles consumer complaints.

By: Amit

Amit — Wed, 17 Jun 2009 00:27:27 +0000

I agree with Poonam. I am buying mine from Vegas and helping state of Nevada not California. Why should I pay extra $40.00…no California is going loose $23 that I was going to pay and now Nevada will gain it.

serves them right.