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Thread: Taxes on "free" features? "No-cost Feature Information" on my bill

  1. #1
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    Taxes on "free" features? "No-cost Feature Information" on my bill

    I saw this on my Verizon bill. Does this mean that they are charging me taxes on my "free" Disney+ account, and possibly even Apple Music, even though I'm not usingit?

    No-cost Feature Information
    If your service plan includes an optional, no-cost feature (for example, some plans include a no-cost Apple Music option), electing this feature may affect the taxes, governmental fees, and governmental surcharges that we bill and collect, even though your service plan price does not change.

  2. #2
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    Yes, it is possible you can be taxed on it. An example of this was if your cellular provider offers you a "discounted, free or buy-one-get-one" device you still pay taxes on the retail value of the device no matter how much you might have charged for it. Some mail-order services may be exempt, but that varies state by state.

    Uncle Sam wants his cut of the action.
    Don't make me turn this car around.....

  3. #3
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    Quote Originally Posted by veriztd View Post
    Yes, it is possible you can be taxed on it. An example of this was if your cellular provider offers you a "discounted, free or buy-one-get-one" device you still pay taxes on the retail value of the device no matter how much you might have charged for it. Some mail-order services may be exempt, but that varies state by state.

    Uncle Sam wants his cut of the action.
    I understand paying taxes on the phone, especially with Verizon where you're getting the phone discount after monthly credits and need to pay taxes on the full value of the phone when you get it. In the case of Disney+, it doesn't even show up on your bill with a corresponding credit, and I have no idea where they're showing the amount they are taxing you on (or the specific amount of the tax).

  4. #4
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    Can you opt out of the Disney or Apple Music features? If so, that may be the way to avoid the taxes.

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    I have the free Disney plus and I have not been taxed on it and yes my state taxes streaming services. My bill is the same as it was before. Aside from the occasional change in the US fee.

  6. #6
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    Even though it’s difficult at this time, you may want to opt out of those features because more states are now taxing streaming services using different strategies, to benefit from the growing industry. These include gross receipts tax, sales tax or a communications service tax on the platforms.

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