Legal Question in Tax Law in California

California Sales Tax on Wireless Telephone Equipment

Is it legal for a wireless telephone company to charge sales tax on equipment purchased at a discounted rate but charging the customer tax on the full retail price? (example: customer paid $499.00 for equipment but was charged tax for $1199.00)


Asked on 11/05/04, 10:31 am

1 Answer from Attorneys
Donald Field Donald L. Field, Jr., Attorney at Law

Re: California Sales Tax on Wireless Telephone Equipment

the general rule is that sales tax is not charged on discounts.

SEE R&TC 6011 & 6012 - http://www.leginfo.ca.gov/cgi-bin/displaycode?section=rtc&group=06001-07000&file=6001-6024

there are special rules relating to wireless telecommunication devices. the issue is whether or not the sale is a "bundled" or "unbundled" transaction.

SEE Regulation 1585 - http://www.boe.ca.gov/pdf/reg1585.pdf

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Answered on 11/05/04, 11:48 am


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