So the iPhone 3G S is lust-worthy, if for no other reason than the 3MP autofocus camera and the speed increase. There’s plenty of news about how AT&T is lagging – no MMS (coming), no tethering (maybe coming), giving smaller discounts to iPhone 3G customers than to new customers.
I’m not eligible for the $299 price because I’ve given Apple too much business, thus AT&T has had to subsidize me twice (read: I bought an original iPhone and a year later bought an iPhone 3G). So I get the option to wait until October to get the $299 price, or pay $499 now. I’ll wait, thanks. Maybe for whatever Apple announces next summer.
But Heidi never upgraded to the iPhone 3G, so she’s eligible for the $299 price. Great, let’s put that puppy in the cart. Whoa, look at the tax!
Yep, the tax is calculated as 9.5% (welcome to California) on the full $699 retail price of the phone. AT&T doesn’t subsidize that, and I couldn’t find it disclosed anywhere. I asked the Apple Store live chat — they were useless (told me the tax was on the $499 price) until I (duh) backed into the number on my own.
So, Apple’s ads should say the 32GB iPhone costs $699, minus an “instant rebate” that depends on how much AT&T has already subsidized you. But giving the real price wouldn’t sound as lust-worthy, would it?
Update July 18:At the online Apple Store, there’s small print at the bottom of the buy iPhone page that says
In CA, MA, and RI, sales tax is collected on the unbundled price of iPhone.
The CA regulation that requires Apple to collect this tax is documented at http://www.boe.ca.gov/pdf/pub120.pdf. What Apple doing isn’t illegal — just a bit misleading.
Tags: 14 Comments
Totally crazy! I wanted to smack someone when I saw how much tax they added on! I guess in the end it’s all worth it. But also, the dubious upgrade fee and the increase in my plan costs with AT&T – pretty damn awful!
There is something unethical about charging you more than you expect to pay without informing you upfront. The phone is advertised for $299. Like everything else one expects to pay sales tax on top of that. Apple or ATT do not clearly disclose in ads or during in-store purchases that the total purchase price is higher than the implied advertised price.
I also live in CA and just bought one of the $99 iphones; the tax on my $99 iphone was $50! I could not believe it! The sales person who helped me said nothing about it, until I went to pay for the phone and knew 9.5% of $99 was not $50. The receipt says $99 for the iphone, and 9.5% sales tax = &50, so the total was $149. That is incorrect! 9.5% of $99 is not $50, but that’s what the receipt says! How can they get away with that, especially when the sales person(along with ads all over the store) say the iphone was on sale for $99? I do not recall any other time where I ever paid tax on the original price of a sale item, instead of paying tax on the sale price. I am filing a complaint with the Better Business Bureau! I would encourage others people who paid outrageous taxes on their iphones to do the same.
Lisa, it turns out this is the law in California. See http://www.boe.ca.gov/pdf/pub120.pdf where it states:
When the sale is a bundled transaction, the retailer must report and pay tax based on the unbundled sales price of the cell phone whether or not the price of the phone is itemized on the invoice.
Here, “bundled” applies since you bought the phone + 2 year service. if you bought the phone “unbundled” (i.e. without the service) you’ld have to pay the full (unsibsidized) price, and you’d have to pay tax too.
Then why, in Massachusetts, does the AT&T store charge sales tax on the $99 upgrade price?
This is BS. I was just on the phone with the Premier Website and the person I was talking to could not find anywhere on the Premier Website where it said that you would pay tax on the entire price of the Iphone 3GS. Then he told me to hold on and he had his entire floor look for the documentation on the website which said this and no one could find it. He pawned me off to AT&T customer care who does not even deal with the sale of IPhones so I could see about getting a refund on the extra sales tax I paid. I did not get anything and everyone at ATT totally avoids the issue about not making it apparent that you truely are not paying tax on the $199 or $299 for the Iphone. If you would like to call Premier and do your own investigating into what these crooks are doing here is thier number 866-499-8008. If the Premier people cannot even find on their own stupid website where it says you will pay sales tax on the original price of the cell phone how can they expect the average user to do so!!!???
AT&T and PREMIER are crooks and the STATE GOVERNMENT of CA are crooks as well!
-Robert Altmiller
This is true in Nevada also. The local ATT store told me when I went to buy my first i-phone. They told me I would pay tax on $500.00 retail price, not the $100.00 phone price. Guess I will look into blackberry
Debbie, it is true that they charge sales tax on the full undiscounted price in at&t store in nevada, but if you buy the iphone in apple stores in nevada they only charge sales tax on discounted purchase price. I am not sure why there is disparity between at&t and apple stores, but I will look into them.
Go to Walmart. They’ll only tax you on the amount that you’ve paid. ATT will suck you dry, the’re all about number$$$$$$. Greedy bastards!!!
This goes for refurb also. They will tax you on the $499 orginal price for a used I-Phone.
AT&T are not crooks. THEY do not get this money. Your cruddy states that charge this tax are the ones to blame.
Blame California.
The state says the retailer has to pay tax on the unbundled price not the consumer. YES, it says they can charge it…But you would think after having to sign a 2yr contract they would pay it. AT&T are penny piching overpriced assho***
So. I understand the paying full sales tax on a NEW phone whether bundled or not. But how can they do this on used re-furbished phones. The rules no longer apply since the Full tax was already paid on it once.
You fools! You are paying tax twice:
First – At time of purchase. The unbundled price is taxed.
Second – Over the cost of the subsidy via your phone bill tax.
This should be illegal.
A certain portion of your AT&T Data Charge pays down the subsidy on your shiny new phone each month.