California Court of Appeals Upholds Sales Tax Regulation 1585 on Cell Phone Bundled Transactions

• California Court of Appeals upholds Regulation 1585 requiring sales tax on full price of cell phones
• Plaintiffs challenged the regulation on grounds of services being nontaxable, discounts should be excluded, and tax should be charged on agreed upon price
• Court ruled that agreed upon price includes initial payment for phone plus subsequent monthly payments
• Regulation 1585 allows sales tax on full cost of phone due to bundled transaction with ongoing telecommunication services
• Court rejected plaintiffs’ arguments on technical issues with Regulation 1585, including lack of evidence on economic impact and public notice and hearings
• Ruling emphasizes importance of non-monetary consideration in transactions

Source: salestaxinstitute.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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