What's All This Brouhaha? » Taxes

Suboptimal Retail Experience — Apple iPhone 3G Sales Tax Overcharge

Eric — Sun, 10 Aug 2008 10:05:28 +0000

I went to the Apple store at Valley Fair mall in Santa Clara CA yesterday afternoon to get an iPhone 3G. My mother paid for half of it as my graduation present.

Only after I got home did I discover that Apple overcharged me $16.50. The receipt shows the price of the phone as $299.00 and the sales tax rate as 8.25%, but the amount of sales tax charged was actually $41.17, for a total charge to my credit card of $340.17. The correct amount of sales tax at 8.25% is obviously $24.67, and should have resulted in a total charge of $323.67.

In the store, I didn’t really see what they were charging me. They had me sign for the credit card transaction using a stylus on a handheld point-of-sale terminal, and it might have shown the amount on the LCD, but it was very hard to read, so I (foolishly) assumed that they were competent and honest.

I wonder how many people have fallen victim to this without noticing. Are they actually remitting the full amount of tax they’ve charged to the state of California, or are they pocketing the difference?

Update: As Dan pointed out in a comment, this actually is legal in California.Â If a cell phone is sold at a discount, it has to be taxed at full price: State Board of Equalization Publication 120. I think Apple should have indicated on the receipt that the tax was based on a phone price of $499.

Good Riddance to the San Jose Grand Prix

Eric — Wed, 12 Sep 2007 22:47:40 +0000

Now that the four million dollar subsidy of the San Jose Grand Prix is spent, the promoters have dropped it like a hot potato.Â What a surprise!Â It is claimed that the reason for discontinuing it is downtown construction, but that’s clearly a load of BS intended to let the city save face.Â Such events have lost money for other cities (e.g., Denver), so it’s a shame that the city of San Jose let their taxpayers be fleeced for this boondoggle.

Sports promoters always try to convince cities to spend tax dollars on special events, new stadiums, etc., claiming that they will make a new profit for the city.Â But if they truly were money-making propositions, the cities wouldn’t need to fund them.Â Investors would be falling all over themselves trying to get in on the action.

Strange new online game

Eric — Sun, 15 Apr 2007 18:50:31 +0000

A friend is playing a strange new online game, “TaxCut Free File.” I’ve only observed for few minutes, but it doesn’t actually look like he’s having much fun. The rules seem to be incredibly complicated, and it’s not clear how the player can win. There’s been a lot of swearing at it, and now he’s on the phone with tech support. With that kind of user experience, it is hard to see how they’re going to convince people to buy the full version of the game. Yet apparently they do have many thousands of people playing it.