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Thread: Why Does Virgin Charge Sales Tax in California to Top-Ups?

  1. #1
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    Why Does Virgin Charge Sales Tax in California to Top-Ups?

    When I added $25 to my new Virgin account online I was charged sales tax. I am in California, where those types of transactions are not taxable. No one else charges sales tax on those transactions, and the State Board of Equalization has an opinion letter posted saying they are not taxable: http://www.google.com/url?sa=t&sourc...OMuefQ&cad=rja

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    I'm pretty sure that the laws right now state that if you have a physical presence in a state you must charge sales tax. If you go into the local store and buy a topup card does the store charge a sales tax? If so then I believe they have to charge it online if you order directly from them.

    To circumvent the sales tax, buy your topup from callingmart.com. I have been doing this for months now and love it. The topup pins are available immediately. I save 3% with the coupon code I got from here, plus I get like 50 cents for each new purchase based on my previous month's purchase, since I buy 2 every month. So no tax, basically like 4% off every month.

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    It's not a physical presence issue. There is no sales tax on top-ups or top up cards in California; if you buy a physical top-up card at 7/11 or elsewhere no tax is charged. In my original post I linked to the opinion letter from the state taxing agency that says the transactions are not taxable.

    So, my question remains - why is Virgin charging sales tax when no sales tax is due?

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    Quote Originally Posted by sfnow View Post
    It's not a physical presence issue. There is no sales tax on top-ups or top up cards in California; if you buy a physical top-up card at 7/11 or elsewhere no tax is charged. In my original post I linked to the opinion letter from the state taxing agency that says the transactions are not taxable.

    So, my question remains - why is Virgin charging sales tax when no sales tax is due?
    Sounds like you know more about the issue than any of us do. Try calling 1-888-322-1122 and ask a rep at Virgin Mobile why this is happening now. If you're correct, the rep can actually credit your account for the error.

    Is it possible that the law changed in CA? States are looking for new money anywhere they can find it.

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    http://www.virginmobileusa.com/legal...and_surcharges

    end of story.. it's right in the terms of service

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    I've never been charged sales tax when buying top up cards at Target, Radio Shack or online at VM.

    So this guy is full of you know what.

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    It may be a regional thing but I find that a bit hard to imagine.

    In north Texas, if I buy a VM Top-Up card at any brick and mortar store I pay sales tax in the amount of 8-1/4% plus a fifty cent 911 fee. This makes a $25 top-up actually cost me $27.56.

    If I buy the same top-up direct from VM, over the internet and with a credit card, I pay the exact same $27.56 because VM collects the exact same sales tax and 911 fee.

    Only way I know to avoid this is to use CallingMart. Bought through them, with the discount they give, and with no sales tax or other fees, my total monthly expense is twenty four dollars and a penny ($24.01) which I pay through PayPal.

    I've no way of knowing how much of the $24.01 actually goes to VM, but you know that PayPal is going to deduct something from it for their services and that CallingMart has to make a little bit of profit out of it.

    Still seems like almost too good of a deal.

    All good . . . Doug

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    Quote Originally Posted by heatdepot View Post
    I've never been charged sales tax when buying top up cards at Target, Radio Shack or online at VM.

    So this guy is full of you know what.
    No he's not full of it, this is the exact reason I stopped using my CC to auto top up, because they are charging tax and they shouldn't be, I now buy my cards online (no sales tax) and add them to me account (no sales tax)





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    End of story? The term of service says "We charge state and local sales taxes on all purchases made through our website at www.virginmobileusa.com, including Top-Up transactions that we process directly." I think it is reasonable to interpret that to mean they charge tax when the transaction is taxable under the law of the state. I don't think it is reasonable to interpret that to mean we charge sales tax on all transactions, whether they are taxable or not.

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    People have reported this before. You are correct that it is not supposed to be charged in CA. If you buy top-up cards in B&M stores, they do not charge tax. This is why I never use my credit card on the VM site.

    Buy top-up cards in-store or at callingmart.com. Then add the $25 top-up card to your account each month and that's it. (Also, if you get a Target Redcard, you get 5% off each time, and it also stacks when they have 5% off top-up card sales, bringing it down to $22.55.)

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    Hes full of it cause I am also in Cal and topped up with my cc at VM:

    VIRGIN MOBILE USA 01/25 CARD #*****
    PURCHASE #************************
    888-322-1122, VA 01/26/2011 -$25.00

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    yeah when i first bought an optimus i was just going to top up only but then after taxes it was $28-29. i tried buying in store today but the walmarts over here don't carry virgin top ups or phones anymore. and the first target store i went to was out, i'll have to get one at another location on the way to school monday.

    i thought virgin online didn't use to charge me sales tax to top up. i only came back to virgin because of the android phone.

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    Quote Originally Posted by heatdepot View Post
    Hes full of it cause I am also in Cal and topped up with my cc at VM:

    VIRGIN MOBILE USA 01/25 CARD #*****
    PURCHASE #************************
    888-322-1122, VA 01/26/2011 -$25.00

    It might make a difference if you're having them auto-charge your credit card or doing it manually yourself. Also, the OP made it sound like it was his initial $25 top-up, so maybe that made a difference?

    Other people have reported getting charged tax before here in Cali.

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    Quote Originally Posted by Scottee View Post
    It might make a difference if you're having them auto-charge your credit card or doing it manually yourself. Also, the OP made it sound like it was his initial $25 top-up, so maybe that made a difference?

    Other people have reported getting charged tax before here in Cali.
    I have done a monthly auto topup and been charged sales tax and I am in CA. Not sure why this person was only charged $25. In any case, it really doesn't matter to me anymore. With 5% back on Target Red Card, have just taken to getting them from Target. Cheaper than callingmart.

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    Quote Originally Posted by mathfaster View Post
    With 5% back on Target Red Card, have just taken to getting them from Target. Cheaper than callingmart.
    Hhhmmmmm . . . Yeah, with 5% off of a $25 card at Target the cost would only be $23.75, which is in fact twenty-six cents cheaper than the $24.01 cost of buying the same thing through CallingMart.

    Of course, there is also a small matter of the slightly over one gallon of gas that it takes me to actually drive to Target and back home again plus the fact that I can't shop at Target in my underwear, at 3:00 in the morning, as I can when shopping at CallingMart from the comfort of the recliner in my den.

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