Class action lawsuit against Apple seeks to punish them for misleading sales tax
I remember the first time I bought a highly discounted cell phone. It was $99 with a 2-year wireless agreement, but I was shocked when I was also charged over $30 in sales tax.
"I believe you've made a mistake on the tax," I told the sales rep.
"No, we tax the phone at its standard price of $399," I was told in response.
Believing this to be illegal, I told them that they couldn't do this. The rep then explained, "I can understand why it looks weird to you, but what's really happening is you're paying full price on the phone, but getting a $300 discount on your cell service. But to make it easier and more instant, we just give you the discount on the phone. However, a full $399 sale of the phone is really taking place, and the state of California requires that sales tax on that amount is paid."
I was annoyed, but I believed the explanation.
Indeed, the sales rep was correct. California does require sales tax to be paid on the retail value of the item, in such a transaction, if it is "bundled" with a service contract. This prevents wireless providers from dodging sales tax by folding the cost of the device into the monthly service charge, the latter of which is NOT subject to sales tax.
Anyway, in order to prevent customers from getting angry about this weird and shady-looking tax structure, some retailers choose to simply eat the tax difference and pay the state back on their own. Walmart is/was one of those retailers. Apple, however, would always charge in tax exactly what the state collected from them.
A lawsuit was filed this year against Apple for deceptive advertising. Basically, the lawsuit contends that Apple was the ONLY retailer not disclosing up front that consumers would need to pay the retail-value of sales tax on discounted "bundled with service" iPhones, while all other retailers either disclosed it clearly or didn't pass the higher tax onto customers.
Here is the suit: https://eclaim.kccllc.net/caclaimfor...0Complaint.pdf
It's of the class action variety. You do not need to opt-in. If you bought an iPhone bundled with service directly from Apple (such as at the Apple store), you are part of the class, provided the purchase was between 2009 and 2014.
Of course, since this is a class action suit, I imagine that if I do get anything, it will be sometime around 2019, and it will likely be something like a $5 gift certificate to the App Store.
Here's the website about the suit: https://eclaim.kccllc.net/caclaimforms/aza/home.aspx
