Massachusetts Unquenchable Thirst for Tax Revenue

07Jul11

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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4 Responses to “Massachusetts Unquenchable Thirst for Tax Revenue”

  1. 1 Domino

    This is actually double taxation. The phone companies make up for the subsidized phones as a portion of the monthly service charges. Since there are taxes on the monthly bill, this is in essence, double taxation.

  2. 2 Buddy

    Really low if you ask me – the state of Massachusetts constantly gets taxes wrong- this is double taxation. I will never buy another cell phone in Massachusetts again – hello New Hampshire – can you hear me now.

  3. 3 MAsucks

    Someone needs to beat up the Mass state law maker in the dark ally 🙂

  4. Wow that was unusual. I just wrote an incredibly long
    comment but after I clicked submit my comment didn’t show up.
    Grrrr… well I’m not writing all that over again. Anyway, just
    wanted to say great blog!


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