General Question

shilolo's avatar

Why is the projected sales tax so high on this internet purchase?

Asked by shilolo (17834 points ) January 11th, 2010

I have been contemplating buying two new iPhones for myself and my wife. Just surfed over to the ATT website and plugged it into their calculator. The two 32G phones would be $600. It estimates the sales tax for my zip code at $132! That’s 22%! Is that possible? Am I missing something? Note, I live in California. I know the taxes here are high (sales tax included), but 22%?

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9 Answers

dpworkin's avatar

Maybe there are telephone excise taxes.

shilolo's avatar

Well, after much searching, I answered my own question. Apparently, state law in CA requires one to pay the sales tax on the full (unsubsidized price) of the phone. Also mentioned in tiny letters at the Apple store. WTF is wrong with California (this also applies to MA and RI, for what it’s worth)!!!!!!!!!

This brings up another question. If I buy the phones at a store while out of the state, do I still have to pay the CA taxes? Is that considered tax evasion?

njnyjobs's avatar

What’s wrong is CA lawmakers who make the laws . . . or is it the voters who put these clowns in office?!?!? HMMMM… does this question need to be asked here?
I dont think out-of-state purchase qualifies as tax evation… It may be considered tax avoidance, which is not illegal.

But I’m not a tax accountant or a lawyer, but I stayed at the Holiday Inn Express last night . . . .

dpworkin's avatar

Have it drop-shipped to a no-sales-tax state.

shilolo's avatar

@pdworkin Does it matter where it’s shipped, or where the purchase is made? I’m going to gather the later, but I’m not sure.

jaytkay's avatar

@shilolo Does it matter where it’s shipped, or where the purchase is made?

Where it is shipped. I worked many years in mail/web catalog sales, and it’s all about the delivery point.

john65pennington's avatar

Have the phones mailed to a relative in another state, where the taxes are much lower. have the relative to Fed Ex it to you. you will save at least 50%.

dpworkin's avatar

Definitely the shipment point. Technically, when you bring it into California, you then owe a “use” tax, equal to the amount of the sales tax, but since this is a self-report item, no one really pays it unless they are being prosecuted for tax evasion on very large items (like million-dollar artworks.)

herman714's avatar

@njnyjobs Loved your tag line at the end of your answer. I remember those commercials

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