how’s the taxes calculated if I have a trade in? Preordered iPhone 12 pro max, 1099 plus 6% tax 65.94. I have a trade in iPhone 8 Plus, worth 210, that’ll drop the phone price to 889. Apple still charged me 65.95 tax. I’ve only paid 889 out of pocket, tax should be calculated base on 889 instead of 1099?
It’s the way states deal with fairness in consumer sales tax representation. Tax is almost always based on the listed retail price. Not the price after rebates, gift cards, trade ins or whatever (things like cars are different, since their is no firm retail list price and price is negotiable, so tax is based on the final negotiated price, not the MSRP or invoice price).
Of course an actual listed sales price on a consumer product is taxed at that listed sales price. But is has to be a publicly listed sales price, so everybody goes in knowing that’s the price and the tax rate will apply to that listed sales price during the sale.
It’s the way states deal with fairness in consumer sales tax representation. Tax is almost always based on the listed retail price. Not the price after rebates, gift cards, trade ins or whatever (things like cars are different, since their is no firm retail list price and price is negotiable, so tax is based on the final negotiated price, not the MSRP or invoice price).
Of course an actual listed sales price on a consumer product is taxed at that listed sales price. But is has to be a publicly listed sales price, so everybody goes in knowing that’s the price and the tax rate will apply to that listed sales price during the sale.
You are incorrect. Read the fine print of an online order
“Trade In: iPhone 12 Pro and iPhone 12 Pro Max pricing based on trade in of iPhone Xs Max in good condition. Trade-in values require purchase of a new iPhone, subject to availability and limits. Trade-in values will vary based on the condition, year, and configuration of your eligible trade-in device. Not all devices are eligible for credit. You must be at least 18 years old to be eligible to trade in for credit or for an Apple Gift Card. Trade-in value may be applied toward qualifying new device purchase, or added to an Apple Gift Card. Actual value awarded is based on receipt of a qualifying device matching the description provided when estimate was made. Sales tax may be assessed on full value of a new device purchase. In-store trade-in requires presentation of a valid photo ID (local law may require saving this information). Offer may not be available in all stores, and may vary between in-store and online trade-in. Some stores may have additional requirements. Apple or its trade-in partners reserve the right to refuse or limit quantity of any trade-in transaction for any reason. More details are available from Apple’s trade-in partner for trade-in and recycling of eligible devices. Monthly pricing: Available to qualified customers and requires 0% APR, 24-month installment loan with Citizens One or Apple Card Monthly Installments and iPhone activation with AT&T, T-Mobile, or Verizon for purchases in an Apple Store. Taxes and shipping not included in monthly pricing. Additional Apple Card Monthly Installments terms are in the Customer Agreement. Additional iPhone Payments terms are here.”
The value of your trade in device is only an estimate until the final value is determined upon receiving the trade in. You get a cash credit for the trade in. The price of the new device is not a discounted price under consumer law. It is sold at full retail, and taxed at full retail. You get a cash credit for your device that you may, or may not, apply towards the price.
Sales tax would only be on the lower price if that was an advertised sale price. The price with a trade in is still the price as listed on the web site or in store. That is what you’re taxed on.
Even if you’re using the offered cellular specific trade in offers, e.g. AT&T:
In the USA sales tax will be based on the full retail price of the device when trading in an other device. The trade in is recorded as a direct personal credit to you, which you then choose to apply towards the full retail price of the device. But from the State’s point of view, Apple still sold a new device at full retail, so they want their full retail sales tax.
think of what happens when you order from Apple online. You actually do pay the full retail price (even if financed, Apple is still paid in full by the creditor). You get a deposit to your payment method later after your trade in is received and the final trade in value determined. So from the State’s records, all they know is Apple sold a new device at full retail price, so that sets what gets taxed.
If your phone is worth $100 and the phone you want to purchase is $799, you'll pay $699 plus the tax rate in your area on a purchase of $699. This should be the right way, Apple only allows one trade in towards new purchases. The rest trade ins are processed giftcards.
Ecm419 wrote:
If your phone is worth $100 and the phone you want to purchase is $799, you'll pay $699 plus the tax rate in your area on a purchase of $699. This should be the right way, Apple only allows one trade in towards new purchases. The rest trade ins are processed giftcards.
Apple has no say in how taxes are applied. In the U.S., that is determined by state and local laws. Apple is required to abide by those laws. So, contact your elected officials and complain to them. If you're in the U.S., maybe wait on that until February.
Yep just saw this too on the web, thanks
Tax is always charged base on the full price of the product.
