That is nice, but my question is who is getting the trade-in: Verizon or Samsung. Sales tax in my state varies based on whether it is a manufacturer discount or it the retailer reselling the trade-in phone itself.
Can anyone tell me if the trade-in Verizon allowances for the Note8 are coming from Samsung or Verizon? I was charged sales tax on full retail cost of phone instead of what I actually paid for it including trade-in. My state tax office says I may have been overcharged unless Samsung is buying my trade in from Verizon.
You seem to have done your homework on this, HEADWO35. We know taxes can become a very tricky situation. Here's the way taxes are collected and charged when it comes to purchasing a new device on the Device Payment Plan. The sales tax is based on the retail price. The $240 you mentioned is applied "after the sale" and is considered a gift in exchange for the trade you sent in, rather than a discount off the purchase price. While it has the same effect on what you actually pay, it has no effect on the assessment of the tax. Does this help clear up the details?
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How can you say it's after the sale when Verizon asks for the trade info before the sale is complete. Verizonwireless.com does it in a single transaction. As do the corporate stores. Not 2.
“Trade or volume discounts
Certain discounts offered at the time of sale will reduce the taxable receipt. Any discounts that result in a reduction in the selling price, such as a trade discount, volume discount, or cash-and-carry discount, are subtracted before calculating the amount of sales tax due on the sale.
These discounts are given at the time of sale, based on the type or quantity of merchandise purchased, and represent a reduction in the purchase price.”
Good luck, the whole way states collect taxes on cell phone purchases is stacked against the consumer and citizen. It mostly goes back when cell phones were given free in many cases with contracts. The states wanted the revenue on the initial purpose, but conveniently ignored the fact you were paying for that phone in the form of higher monthly payments for service that was already taxed and usually taxed at an even higher rate than regular sales tax.
Did you receive the $240 off the purchase price or as a cash equivalent gift card or is it being given as a credit. The way New York has its laws it would appear only if the price is shown $240 off would you have a legal standing.
Example: Assume the same facts as in the example above except that only $2,500 of the trade-in allowance is applied against the purchase price of the new vehicle, with the other $2,000 being given to the purchaser in cash. The $2,000 received in cash cannot be applied as a trade-in allowance against any later purchase from you or from another seller. https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/taxable_receipt.htm
Remember, Verizon lawyers signed off on this, and you will need lawyers to get it reversed, if you have a valid claim.
Best of luck, fellow citizen.