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You are here: MacNN Forums > Hardware - Troubleshooting and Discussion > Mac Notebooks > Why so high!?

Why so high!?
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newcomer
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Mar 6, 2004, 06:09 PM
 
Currently have 800Mhz iBook.

Want to jump to a 15 inch PB. As a UK student I can buy the Superdrive version for £1838 (inlcuding VAT at 17.5%)

If I was studying in the US (now I know this is a bit of a false ecnomy becuase I'd be paying huge course fees) I could buy the same for $2299 plus local sales tax.

How much would that sales tax be exactly? Even if the PB was taxed at the same rate of 17.5% there would still be a price difference of nearly £400!!

On that saving I could ask a mate at Colombia to buy one for me, fly to New York for the weekend picking up an iPod and some software at the same time and come home with a big smile on my face.

So if anyone knows... How much is sales tax in New York? How much is a UK power adapter? I am guessing that being a portable, the warranty on a PB is good anywhere in the world right?
     
danbrew
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Mar 6, 2004, 06:16 PM
 
Would you run into an issue "importing" the PB into the UK? If the tax/revenue guys over there are anything like our customs people, they're gonna want you to put a tax/import/whatever when you bring it in. I suppose you could put it in your carry on and pretend it wasn't a new computer, but if you have the box and all that, they may say, "hmmm... that's a new computer. pay up."
     
gbarill
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Mar 6, 2004, 06:18 PM
 
http://www.taxadmin.org/fta/rate/sales.html

according to this, sales tax in NY is 4.25%

sales tax in britain is 17.5%? that's pretty high, i thought it was high in ontario (15%), and here in british columbia it's 14.5%

and the above guy is right, customs will probably want you to pay tax on it, so you'll have to take it as carry-on (perhaps have a computer bag before you buy the apple) and pretend you brought the computer with you from the UK. if you have it in a backpack (even with the books and software cd) and not the original box, you'll probably be fine, they'll wave you through the security check without making you pay..
     
newcomer  (op)
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Mar 6, 2004, 06:23 PM
 
Originally posted by danbrew:
Would you run into an issue "importing" the PB into the UK? If the tax/revenue guys over there are anything like our customs people, they're gonna want you to put a tax/import/whatever when you bring it in. I suppose you could put it in your carry on and pretend it wasn't a new computer, but if you have the box and all that, they may say, "hmmm... that's a new computer. pay up."
Or, as you say - I could just stick it in my crumpler, and get friends in New York to snail mail the empty box.

I just found out that Boston (where I also know someone who qualifies for education discount) Sales Tax is 5%.

On the aforementioned 15inch Superdrive PB that is a saving of £478

...or $872.

Apple have got to be taking the PI$$
     
fizzlemynizzle
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Mar 6, 2004, 06:28 PM
 
or maybe you should honor the tax system rather than circumvent it..
     
newcomer  (op)
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Mar 6, 2004, 06:31 PM
 
Apparently some states don't even have sales tax on computers. So a PB bought in Oregon, Montant, Alaska is tax free??
     
newcomer  (op)
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Mar 6, 2004, 06:38 PM
 
Originally posted by gbarill:
http://www.taxadmin.org/fta/rate/sales.html

according to this, sales tax in NY is 4.25%

sales tax in britain is 17.5%? that's pretty high, i thought it was high in ontario (15%), and here in british columbia it's 14.5%

and the above guy is right, customs will probably want you to pay tax on it, so you'll have to take it as carry-on (perhaps have a computer bag before you buy the apple) and pretend you brought the computer with you from the UK. if you have it in a backpack (even with the books and software cd) and not the original box, you'll probably be fine, they'll wave you through the security check without making you pay..
Even if compelled to pay VAT on import of 17.5% I would still save £359 or $655. Still a hefty saving. This rip off really cheeses me off.
     
nobitacu
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Mar 6, 2004, 07:13 PM
 
Wow, and I thought Minnesota has high taxes. Or at least one of the highest in the U.S.

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TheFake
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Mar 6, 2004, 07:40 PM
 
i suggest buying it in a tax free state. i bought mine in oregon, and i know that saved me hundreds.

now if only i didn;t live here and have to pay the outrageous income tax.
     
madmacgames
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Mar 6, 2004, 08:06 PM
 
17.5% sales tax? The Queen is giving it to you good, eh?
     
jld
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Mar 6, 2004, 09:48 PM
 
Originally posted by madmacgames:
17.5% sales tax? The Queen is giving it to you good, eh?
That's why we broke away after all.
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RayX
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Mar 6, 2004, 11:35 PM
 
Here is an article talking about the price difference between Macs in Australia and the US.
Might be a similar situation in the UK and other parts of the world.

"Do Macs cost too much?"
the barrow | David Frith
FEBRUARY 24, 2004
http://australianit.news.com.au
     
Pierre B.
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Mar 7, 2004, 05:44 AM
 
Originally posted by madmacgames:
17.5% sales tax? The Queen is giving it to you good, eh?
That's nothing. In Belgium the taxes are 21% and in Scandinavian countries something like 25% .

By the way, there is an interesting story on the european tax subject and Apple products by Macbidouille (in french, sorry). It says briefly that a dealer in Paris that buys directly from the US, pays taxes and transport, can finally sell the roducts at prices lower by:

- Imac -7%
- Emac -9%
- G5 - 10%
- PowerBook - 15%
- Ibook - 17%
- Ipod - 18%

with respect to the prices he could offer if he did pass through Apple France!

Now take this: in the US Apple Online Store, a 20" iMac costs $2199. In Belgium Apple Online Store, the same item costs 2499€ = 2065.29€ + 433.71€ tax (21%). Now where the hell this 2065.29€ comes from? According to the current equivalence 1€ = $1.23, the initial price should be 2199/1.23 = 1788€. Add to that 21% tax and you are at 2163€, and not 2499€. Now I understand that there is transport somewhere, but here we talk about 336€ more ... . Under the current currency equivalence, Apple could offer about the same price in € in Europe (in Belgium to be precise), tax INCLUDED, as it does in $ in the US. Unfortunately, this is not the case and european citizens are treated by Apple like there is no tomorrow.
( Last edited by Pierre B.; Mar 7, 2004 at 01:53 PM. )
     
msSwitch
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Mar 7, 2004, 09:59 AM
 
Originally posted by gbarill:
http://www.taxadmin.org/fta/rate/sales.html

according to this, sales tax in NY is 4.25%

sales tax in britain is 17.5%? that's pretty high, i thought it was high in ontario (15%), and here in british columbia it's 14.5%

and the above guy is right, customs will probably want you to pay tax on it, so you'll have to take it as carry-on (perhaps have a computer bag before you buy the apple) and pretend you brought the computer with you from the UK. if you have it in a backpack (even with the books and software cd) and not the original box, you'll probably be fine, they'll wave you through the security check without making you pay..
When I saw your post about the NY sales tax I thought it was a typo. But actually, the sales tax rate that you've quoted for NY is only a part of the tax that consumers actually pay. The tax is made up of a local or county tax + the NY State tax of 4.25%. So, for the NYC area, the total sales tax is now 8.625%. Here's an example:
Total sales tax paid in The Bronx (NYC)of 8.625% is made up of the following: Bronx County - 4.375%
NY State - 4.25%. I WISH the tax were only 4.25%. However, right across the river in New Jersey, sales tax is only 6%, and in some urban enterprise zones the state tax is waived and only the local tax is collected (or vice versa), bringing the actual sales tax that consumers pay down to only 3%! AND, there's no tax on clothing or shoes in NJ (ok, that's off the subject, but I was on a roll).
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MaxPower2k3
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Mar 7, 2004, 11:42 AM
 
Originally posted by gbarill:
according to this, sales tax in NY is 4.25%
that may be true for new york state, but be aware that in new york city it's somewhere around 8.25% (either 8 and an eighth, or 8 and 3/8, i think)



edit: the poster above me explained it much better.

and yeah, here in NJ there are a couple of areas (one is in Elizabeth, where there's an Ikea and one of the largest Toys R' Uses in the country) with 3% sales tax

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fizzlemynizzle
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Mar 7, 2004, 01:54 PM
 
Under the current currency equivalence, Apple could offer about the same price in € in Europe (in Belgium to be precise), tax INCLUDED, as it does in $ in the US. Unfortunately, this is not the case and european citizens are treated by Apple like there is no tomorrow.
Am I misunderstanding you or are you trying to say that you're mad at Apple because they won't shoulder the tax burden the EU puts on its citizens?
     
workerbee
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Mar 7, 2004, 02:21 PM
 
Originally posted by fizzlemynizzle:
Am I misunderstanding you or are you trying to say that you're mad at Apple because they won't shoulder the tax burden the EU puts on its citizens?
My guess is he's mad at Apple for not adjusting prices to current US$ value levels. Price differences between US and EU (or AU for that matter: read the Australian IT article) can sometimes be quite steep, and it's not because of taxes.
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danbrew
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Mar 7, 2004, 03:28 PM
 
I'm not quite brilliant enough to quote the economic theory behind it, but every company charges different prices for goods and services in different markets. Some of it may be the value of the local currency against the dollar, some of it may be corporate greed, but more likely than not the price is set based upon what the local market will bear as well as the cost of doing business in that market.

How do we arrive at profit? Whatever is left after the various components that went into producing the product. What components should be considered:

* cost of raw goods
* cost of manufacturing
* cost of payback for intellectual property development
* cost of sales & marketing
* others I'm certain I haven't thought about...

Some of these items might be fixed - for example the screen and the case and the power supply and the hard drives, etc. are fairly constant. The cost of sales and marketing might not be so fixed - what if the average salary of a sales rep in the US is $100,000. What if it is $110,000 in the UK? I'm not suggesting that the guys in the UK make more, but what about the cost of the position? Taxes, healthcare, and other obligations of the employee - the "fully burdened" cost of the position.

     
chabig
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Mar 7, 2004, 03:52 PM
 
Apparently some states don't even have sales tax on computers. So a PB bought in Oregon, Montant, Alaska is tax free??
Oregon and Alaska don't have sales tax at all. They're not giving special deals on computers.

Chris
     
Pierre B.
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Mar 7, 2004, 03:57 PM
 
Originally posted by fizzlemynizzle:
Am I misunderstanding you or are you trying to say that you're mad at Apple because they won't shoulder the tax burden the EU puts on its citizens?
Exactly, you are misunderstanding me. workerbee got it right. I am complaining about Apple not adjusting pricing according the current US price levels and currency equivalence. As I explained, if Apple respected that, then the 20" iMac should cost in Belgium, without the taxes, 1788€. With 21% tax this goes up to 2163€. But Apple asks 2499€ for this iMac. Why 336€ more?
( Last edited by Pierre B.; Mar 7, 2004 at 05:07 PM. )
     
Eriamjh
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Mar 8, 2004, 08:40 AM
 
Bring home the PB and shipping the box is the best way (if you REALLY gotta have the box).

New Hampshire is a sale tax free state (smalldog.com afterall).

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vsurfer
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Mar 8, 2004, 10:03 AM
 
Tax in outlying New York State may be less, but if your buddy was going to buy in NYC, Long Island, Westchester, or suburbs the tax is over 8%.
     
bamchum
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Mar 8, 2004, 10:25 AM
 
Basically, what has happened in the last year or two is that the euro has risen over 40% against the dollar. Not too long ago, a euro was worth about $0.84. Now a euro is worth about $1.24.

Meanwhile, Apple has kept its European prices more or less constant throughout this time. This allows them to increase their profits. The point is: they haven't passed any of the exchange rate difference back to the consumer.

This has perverse effects, including the rise of gray market goods. For example, I was able to sell my 1Ghz Titanium powerbook here in Europe for more than it cost me to buy its 1.25Ghz Aluminum replacement in the states.

Far be it from me to tell Apple how to run its business, but they are almost certainly sacrificing market share for profits. I work in a large library where there are loads of people using laptops. Apples are way outnumbered and almost all the Apples you see are iBooks, not powerbooks. The powerbooks cost twice as much as roughly comparable PCs.
     
Dougmc
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Mar 8, 2004, 10:56 AM
 
Sales tax is only one type of tax paid in the U.S. Although sales tax may be lower, or non-exsistent, in some states, other taxes are likely higher. Some states pay nothing for their car license plates, some pay a hefty excise tax. Sales taxes can differ within a metropolitan area as well—restraunt taxes might be higher to pay for that new stadium.

Simply because a sales tax is higher, doesn't mean that the government is screwing the population—simply, they're collecting the funds from different revenue paths than other communities.

Then again, maybe the government is screwing you. Get out and vote (if you live in a democratic society) and you can control that.

Can you imagine what the tax rate would be if everyone started trying to find a loop-hole around the system?

If you cheat the system, you will loose your right to complain about that pot-hole in front of your house that never seems to get fixed because there are no funds to pay for it. You won't be able to get computers into your schools because the funds just don't exsist.

Taxes are a neccesary evil.
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typoon
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Mar 8, 2004, 11:28 AM
 
from what I understand in NY state the Sales tax is 7% in NYC it's 8.65%
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fizzlemynizzle
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Mar 8, 2004, 12:13 PM
 
Originally posted by Pierre B.:
Exactly, you are misunderstanding me. workerbee got it right. I am complaining about Apple not adjusting pricing according the current US price levels and currency equivalence. As I explained, if Apple respected that, then the 20" iMac should cost in Belgium, without the taxes, 1788€. With 21% tax this goes up to 2163€. But Apple asks 2499€ for this iMac. Why 336€ more?
Ok.. do other computer manufacturers like HP/Compaq, Toshiba, Dell, Sony, etc make adjustments in their pricing?
     
newcomer  (op)
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Mar 8, 2004, 12:17 PM
 
Originally posted by bamchum:
Basically, what has happened in the last year or two is that the euro has risen over 40% against the dollar. Not too long ago, a euro was worth about $0.84. Now a euro is worth about $1.24.

Meanwhile, Apple has kept its European prices more or less constant throughout this time. This allows them to increase their profits. The point is: they haven't passed any of the exchange rate difference back to the consumer.

This has perverse effects, including the rise of gray market goods. For example, I was able to sell my 1Ghz Titanium powerbook here in Europe for more than it cost me to buy its 1.25Ghz Aluminum replacement in the states.

Far be it from me to tell Apple how to run its business, but they are almost certainly sacrificing market share for profits. I work in a large library where there are loads of people using laptops. Apples are way outnumbered and almost all the Apples you see are iBooks, not powerbooks. The powerbooks cost twice as much as roughly comparable PCs.
We should really term this currency movement in terms of the dollar falling, rather than the £ or euro rising.

Either way. If a few more folk here in the UK/Europe realised they could combine their Mac purchase with a weekend over the other side of the pond and still save money, Apple's sales over here would fall further still.

It's the Powerbook which gets my goat, for tis' the machine I covet the most, but the iPod is appalling value for money over here too!

As far as costs in the EC go, any wages/salary costs associated with production, sales and marketing will almost certainly be higher in the US.

Cars are also such shocking value in the UK that many have taken to buying overseas and shipping.
     
Powaqqatsi
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Mar 8, 2004, 12:33 PM
 
Originally posted by fizzlemynizzle:
Ok.. do other computer manufacturers like HP/Compaq, Toshiba, Dell, Sony, etc make adjustments in their pricing?
I know Sony does..

I'll check the others if I have some time.
     
cenutrio
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Mar 8, 2004, 01:28 PM
 
Now I live in the States, but you're right, Apple prices in Europe stink!

However, I bought and sent a HP pavilion 7000 series (17" top of the game) to Spain and my uncle saved almost 1000 euros compared to the official HP price.

So, probably any company does do it.


If you buy an Apple laptop you get worldwide guarantee. Ask your friend to buy it and ship it to you. It is a good save.
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bamchum
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Mar 10, 2004, 07:58 PM
 
It's a little hard to compare directly, but it would seem that a 2.8Ghz Dell Inspiron 9100 in comparable recommended configurations (and before any rebates but including taxes) sells for $1,899 in the US and 1,732 euro in France. 1,732 euro is about $2,115 in the US, but that difference is more than explained by the tax difference. Basically, the prices before tax (VAT in France is 19.6% on such things) are comparable. Dell actually seems to sell the machine for less in France than in the US before taxes.

There's currently a 100 euro rebate in France and a $250 one in the US.

By contrast, the 15" superdrive powerbook sells in the US for $2,599. In France, it sells for 2,988 euro or $3,654. Is it any wonder that very few people buy them in France? That difference cannot be explained by the differences in tax rate alone.

I may have made mistakes doing these comparisons, so if someone else wants to check, please do so.
     
newcomer  (op)
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Mar 11, 2004, 04:27 PM
 
Originally posted by bamchum:
It's a little hard to compare directly, but it would seem that a 2.8Ghz Dell Inspiron 9100 in comparable recommended configurations (and before any rebates but including taxes) sells for $1,899 in the US and 1,732 euro in France. 1,732 euro is about $2,115 in the US, but that difference is more than explained by the tax difference. Basically, the prices before tax (VAT in France is 19.6% on such things) are comparable. Dell actually seems to sell the machine for less in France than in the US before taxes.

There's currently a 100 euro rebate in France and a $250 one in the US.

By contrast, the 15" superdrive powerbook sells in the US for $2,599. In France, it sells for 2,988 euro or $3,654. Is it any wonder that very few people buy them in France? That difference cannot be explained by the differences in tax rate alone.

I may have made mistakes doing these comparisons, so if someone else wants to check, please do so.
Hmm. That's v. interesting. Apple seems prepared to sacrifice its market share in Europe for the sake of short term profit. The really annoying thing is that once you love Macs, you effectively become an addict.

It's like the dealer who can price his heroin however he likes, because he knows that somehow the addicted customer will scrape together the cash for that next fix (or PB upgrade!)
     
chillinCHiEF
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Mar 11, 2004, 05:52 PM
 
I'm not 100% sure how VAT taxes work, but doesn't that mean you don't have any income tax?

If so, it really isn’t that bad. The government here (U.S.) takes about 26% out of my weekly paycheck.
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bamchum
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Mar 11, 2004, 06:19 PM
 
Originally posted by chillinCHiEF:
I'm not 100% sure how VAT taxes work, but doesn't that mean you don't have any income tax?

If so, it really isn’t that bad. The government here (U.S.) takes about 26% out of my weekly paycheck.
I take it this isn't a joke, so here's the answer:

Yes, we still pay income tax in Europe and at much higher rates than in the US. 26% of a weekly paycheck is peanuts, assuming you make more than $10,000/year.
     
newcomer  (op)
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Mar 11, 2004, 06:38 PM
 
UK the top rate is 40%.
     
bamchum
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Mar 11, 2004, 07:44 PM
 
Top rate in France is 54%. Top rate in Ireland is 42%. In Ireland, you hit the top rate if you make over about $25,000/year.
     
gbarill
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Mar 12, 2004, 01:23 AM
 
canada's income tax is pretty high, although i'm sure some other countries are definately higher. here the federal tax rate is:
16% : $0 - $32,183 of taxable income;
22% : $32,184 - $64,368 of taxable income;
26% : $64,368 - $104,648 of taxable income; and
29% of taxable income over $104,648.

then the provinces take their cut. the different provincial governments take different amounts but newfoundland and labrador have the highest rates:
10.57% on the first $29,590 of taxable income, +
16.16% on the next $29,590, +
18.02% on the amount over $59,180

so if you make $60,000/year in newfoundland, income tax is 38%

and i'm sure there's other taxes too, that i don't know about
     
chillinCHiEF
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Mar 12, 2004, 09:00 PM
 
Originally posted by bamchum:
I take it this isn't a joke, so here's the answer:

Yes, we still pay income tax in Europe and at much higher rates than in the US. 26% of a weekly paycheck is peanuts, assuming you make more than $10,000/year.
Sorry to hear that. For some reason, I thought VATs were made to take the place of traditional income taxes. I've never been to a country that has them, so thanks for the info No, I don't make more than $10,000 a year (I work a part time job for spending money at college.) 26% is peanuts compared to what people with full time jobs get taken out of their paychecks here as well, but I was under the impression that you guys didn't have any additional taxes taken out. The fact that you do makes my point irrelevant.
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