Upgrading To iPhone 5? Well You May Need More Than $199

By  | 

Apple are all set to reveal their latest iPhone 5 tonight and thousands of the units will then be on the shelves during the last week of September, probably. However you may need a bank loan before you go out to purchase a new iPhone 5 in some regions, but why?

iPhone 5 may start at $199 on contract but will cost more for depending on your location

One CNET reader bought two iPhone 4S units for $199 each in California on AT&T and then did a double take when looking at the bill as there was more than $100 added on in tax. California’s municipal tax tables show 25% tax which happens to be above Visalia’s total sales tax of around 8%. So if you live here and purchase a smartphone you will probably here the same explanation for the amount of tax.

State law says that you have to be sales taxed on the full cost of the phone which is purchased with a carrier subsidized discount. In the case above the buyer was charged tax on original price of $649 for the iPhone instead of the knocked down price of $199.

The law for tax even covers phones that are offered by the carriers for free. This means that while you may not have to pay for the handset on contract, you will have to pay tax and this could you $100.

It is thought that when Apple releases their iPhone 5 if 1,500 units are sold in Denver it would generate around $35,000 in tax. However in California and some other places the same amount of handsets could generate $90,000. So if you want a new iPhone 5 you may wish to avoid California and drive to another state to make the purchase. Otherwise make sure you have more than that $199 in your bank account before queuing up for one.

Always looking for something new to learn, Mario looks at the internet as one big startup. With him at the helm, continues to head in the right direction of providing high quality and unbiased information on the latest new car models and electronics.