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Question: iTunes 2 cent tax overcharge

On 03/16/2018 I purchased 7 songs from iTunes Store, listed at $1.29 each and my account was charged $9.75, $1.39 for each song and a mysterious extra 2 cents.

7 x 1.29 = $9.03

7 x 1.39 = $9.73


In chat support, Advisor said same thing listed in this thread (Apple iTunes overcharging on sales tax.) namely that it was my state's digital sales tax. State sales tax explains the extra .10 per song, but I pushed back on the .02. After a very long wait for chat response, Advisor said...


Airon

The total amount of the songs you have purchased is 9.75 USD with tax included The total amount of the tax added here is 0.72. So thats 25.00-9.75 = 15.25. There’s another .02 added here. Since a receipts hasn’t been generated we can’t tell what the other .02 added here. I would suggest contacting your tax office regarding the additional .02 with how your tax are calculated and being added to your digital items.


The extra 2 cents isn't from tax. What's going on Apple???

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Thank you ed2345. I finally got to the bottom of the taxes in my jurisdiction; state, county, city, and even a special tax total 7.96% tax rate.


Tax calculated on each song as it is purchased is

1.29 * .0796 = .102684 which rounds down to .10 so each song shows as $1.39


Tax calculated on total purchases for that day is

1.29 * 7 = 9.03 * .0796 = .7188 which rounds up to .72 and so day's total is $9.75


Thus, rounding per song vs. rounding for total day's purchases accounts for the mysterious 2 pennies.

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Mar 19, 2018 6:07 AM in response to bashamz In response to bashamz

.... my state's digital sales tax. State sales tax explains the extra .10 per song,

Assuming you are in the USA, Apple collects tax based on the local taxes of the government authority. It is not only the state that has taxing authority.


For example, in Texas you can pay the state sales tax plus a district tax plus local sales tax.


The USA has thousands of governmental authorities that can collect tax, not just states.


Did you research the correct tax rate(s) for the location where you live? If Apple is charging incorrectly, I am sure they will correct it.

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Mar 18, 2018 5:52 AM in response to bashamz In response to bashamz

What's going on Apple???

Apple are not here, you already know that we just fellow users and that these are user forums. Have you done as Support instructed you to do and contacted your tax offices ? What did they say ? If they said the amount is wrong have you contacted iTunes Support again ?

Mar 18, 2018 5:52 AM

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Mar 19, 2018 6:07 AM in response to bashamz In response to bashamz

.... my state's digital sales tax. State sales tax explains the extra .10 per song,

Assuming you are in the USA, Apple collects tax based on the local taxes of the government authority. It is not only the state that has taxing authority.


For example, in Texas you can pay the state sales tax plus a district tax plus local sales tax.


The USA has thousands of governmental authorities that can collect tax, not just states.


Did you research the correct tax rate(s) for the location where you live? If Apple is charging incorrectly, I am sure they will correct it.

Mar 19, 2018 6:07 AM

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Mar 19, 2018 6:00 AM in response to ed2345 In response to ed2345

Thank you ed2345. I finally got to the bottom of the taxes in my jurisdiction; state, county, city, and even a special tax total 7.96% tax rate.


Tax calculated on each song as it is purchased is

1.29 * .0796 = .102684 which rounds down to .10 so each song shows as $1.39


Tax calculated on total purchases for that day is

1.29 * 7 = 9.03 * .0796 = .7188 which rounds up to .72 and so day's total is $9.75


Thus, rounding per song vs. rounding for total day's purchases accounts for the mysterious 2 pennies.

Mar 19, 2018 6:00 AM

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Mar 19, 2018 12:23 PM in response to bashamz In response to bashamz

bashamz wrote:


Thank you ed2345. I finally got to the bottom of the taxes in my jurisdiction; state, county, city, and even a special tax total 7.96% tax rate.



You are welcome.


Great research. So it turns out that where you live there are actually 4 separate taxes going into the total.


As far as the rounding issue, you may be the first person to actually notice that. 😉 But that way of doing the rounding is consistent with the way any retailer would do the calculation.

Mar 19, 2018 12:23 PM

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Question: iTunes 2 cent tax overcharge