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cellphone deals | editorial

Tax should reflect full cost

GIVEN THE prices associated with too-good-to-be-true cellphone deals - “get a phone valued at $650 for just $149, if you just sign our two-year contract!’’ - it’s no surprise that people balk when hefty tax charges greet them at the checkout counter. Massachusetts is one of two states with a sales tax rule that specifically pertains to cellphone underpricing: Regardless of the discount offered on the phone, taxes are levied according to the actual retail price, which means the $150 phone in this scenario would cost the buyer about $40 in taxes, in addition to the price of the phone.

Consumers aren’t the only ones complaining; retailers are asking the Legislature to eliminate the rule, which they say puts stores at a competitive disadvantage. In truth, it’s hard to imagine a flood of people crossing state lines to buy iPhones, especially since Rhode Island is the other state that taxes phones this way.

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