Massachusetts Unquenchable Thirst for Tax Revenue
Effective July 1st, Massachusetts sales tax law changed for companies that sell cell phones.
As we all know, when you “upgrade” your phone, ie buy a new phone and resign a new two-year agreement, the cell companies offer you a huge discount on the cost of the phone.
For example, if you buy an iPhone 4 16GB and sign a new two-year contract, AT&T sells you the phone for $199. The actual cost of the phone without a contract is $649. And, yes, this is a real price, and real people sometimes pay it if they have no other option.
Prior to July, AT&T, calculated sales tax on the $199. In Massachusetts, the sales tax rate is 6.25% so the tax was $12.44.
Now, the state requires that the sales tax be calculated on the full $649 value of the phone. So, starting July 1st, the sales tax jumps to $40.56 – a $28 increase!
This is how it works for all cell phone sellers in Massachusetts now – corporate, reseller, franchisee, or dealer, AT&T, Verizon, etc…
It seems to me, the state just found a really sneaky way of extracting even more money from it’s citizen’s wallets. Of course, anyone within a tank of gas will run to New Hampshire to buy their new phone.
It’s so much easier for the state to squeeze more money from the taxpayers then to actually reform government, cut waste and slash state payrolls of politically connected hacks.
It’s just how it is in the bluest of all the blue states…..tax and spend, tax and spend, tax and spend.
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Tags: Apple, AT&T, Blue state, Cell phone, Howie Carr, iPhone, Massachusetts, sales tax, Verizon