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  1. #11
    Join Date
    Oct 2016
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    4,099

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Quote Quoting riffwraith
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    Thanks.

    No service nor contract was purchased - only the phone itself.

    As for "free cell service" provided, no I really don't think so. It would have listed that on the bill, no?
    It might or might not list a free service on the bill.

  2. #12
    Join Date
    Sep 2010
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    19,749

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    You have to distinguish the tax on the SERVICE (which will run around 19% in NY) and the tax on the DEVICE.

    What may be happening here is while the phone is only costing $700 out of pocket, there may be a taxable subsidy that is coming into play here. In addition if your price is predicated on you trading in your old phone, note you owe the tax on the full value of the new phone.

  3. #13
    Join Date
    Oct 2014
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    8,023

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Quote Quoting riffwraith
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    Thanks.

    No service nor contract was purchased - only the phone itself.
    Then I don't know how the seller computed the taxes that are owed. One possibility is that they are adding sales tax for the state in which the shipping center for the phone was located (if different than NY) as well as the NY sales tax. That would not be the proper way to do it, though. One way or the other I suspect they've computed the tax incorrectly given that this was the purchase of the phone only and there are no services bundled with it.

    Quote Quoting riffwraith
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    Federal tax? Is there a federal sales tax on cell phones?
    There is no federal sales tax on anything. There are some excise taxes on specific good like gasoline, bows and arrows, alcohol, etc., but not on the sale of cell phone or computing devices.

  4. #14
    Join Date
    Nov 2016
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    120

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Quote Quoting Taxing Matters
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    There is no federal sales tax on anything.
    Didn't think so.

    Just chatted w/the company. I was told there is an excise tax in NY on cellphone sales. The excise tax is an equipment tax that applies. The state of New York and New York City, for example, both apply the excise tax to the equipment purchases.

    I searched, but cant find anything that confirms this. :/

  5. #15
    Join Date
    Oct 2016
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    4,099

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    I found this on the issue.

    https://www.avalara.com/us/en/blog/2...n%20New%20York.

    It seems to be an excise tax on cell phones that are locked to the carrier. Why the state would choose to tax people because of the way the carrier cells phones is beyond me.

  6. #16
    Join Date
    Nov 2016
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    120

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Quote Quoting PayrolGuy
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    I found this on the issue.

    https://www.avalara.com/us/en/blog/2...n%20New%20York.

    It seems to be an excise tax on cell phones that are locked to the carrier. Why the state would choose to tax people because of the way the carrier cells phones is beyond me.
    Thanks for that.

    Read it and understand it, but it doesn't sit right with me. Called NYS dept of tax & finance, and was told there is no addtl tax on the sales of cell phones. Yes to plans, but not to the actual sale of a phone. Which seems to contradict the art - have emailed the author, and let's see if he gets back to me.

  7. #17
    Join Date
    Oct 2016
    Posts
    4,099

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Make sure you read this link that is embedded in that story. https://www.tax.ny.gov/pdf/guidances/corp/g17_1c.pdf

    The consider the locked phone to the part of the plan. Even if there isn't a plan.

  8. #18
    Join Date
    Nov 2016
    Posts
    120

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Thanks.

    Ok, so I finally go a hold of the bill.

    http://jeffreyhayat.com/temp/bill.jpg

    The first problem I see, is the percentages are wrong.

    2.35% of $710 (I am pretty sure that shipping is taxable) is $16.69 - not $17.49

    4.5% of $710 is $31.95, not $33.95

    And so on.

    Then, on the bill, we have two excise taxes, one for the state, and one for NYC. The NYS Local Telecommunications report:

    https://www.tax.ny.gov/pdf/stats/pol...s_and_fees.pdf

    Has "excise tax" in several different places, but seems to point only to service (the first one references taxes paid by the carriers, and not consumers).

    I read the pdf in the post above mine, and although the first line (bold, underlined) seems to says there is an excise tax to the separate charge for a cellphone sold by a provider, I do not see anything else on this topic, including rates - this makes me weary of this doc.

    Any other thoughts here?

    My mom can fill out a tax refund form (I think it's AU11), but would like to glean as much info first.

    Thanks again!

  9. #19
    Join Date
    Oct 2016
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    4,099

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Read my two posts above your last one.

  10. #20
    Join Date
    Nov 2016
    Posts
    120

    Default Re: Sales Tax on Smart Phones More Than Local Tax?

    Quote Quoting PayrolGuy
    View Post
    Read my two posts above your last one.
    Yep - saw that.

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