iTunes 2 cent tax overcharge

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Level 1

8 points

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???

Posted on Mar 18, 2018 5:48 AM

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Answer 1

Best reply

bashamz Author

Level 1

8 points

Mar 19, 2018 6:00 AM 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.

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Answer 2

King_Penguin

Level 10

334,138 points

Mar 18, 2018 5:52 AM 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 ?

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Answer 3

ed2345

Level 9

62,462 points

Mar 19, 2018 6:07 AM 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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Answer 4

bashamz Author

Level 1

8 points

Mar 19, 2018 5:52 AM in response to King_Penguin

Thank you King_Penguin. I meant to say what's going on "with" Apple...my bad. I was unable to contact anyone over the weekend, but think I understand what happened. Please see reply to ed2345 below.

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Answer 5

ed2345

Level 9

62,462 points

Mar 19, 2018 12:23 PM 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.

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iTunes 2 cent tax overcharge

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