when you upgrade to a new phone on taxes do they do it on full retail price or upgrade price
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Depends on the State you're in; it's determined by the State, not Verizon.
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Some states caught on and figure they can double dip you. Hawaii is in the process to match California on retail tax on subsidized devices. While you are paying back that subsidization you pay tax on the parts which you already paid in advance.
In my state TN I pay sales tax on the subsidized price and the upgrade fee and that's it.
The only two states that charge you the full retail tax on a subsidized phone are Cali and Massachusetts. I'm about 90 percent sure on this.
Rhode island too I believe. Hawaii if they pass these new tax laws which a lot of us are fighting.