Dish Billing Issues (Calculation of Sales Tax)

[Rotryrkt]

I just ordered Dish Network again after a 2.5 year stint with Directv. I noticed in my confirmation email that I was being charged Sales Tax on the full amount of my bill before discounts. Since I am getting a $35/month discount, with Indiana's 7% sales tax, this amounts to a $2.45/month overcharge. Directv has never charged tax on the gross amount before discounts, only on the net amount.
I elevated this complaint to the "Office of the President's executive resolution team" to no avail. I was informed that this is the way their billing system is set up and it won't be changed. I politely said goodbye to the gentlemen I was speaking to. I then proceeded to file a consumer complaint with Indiana's Attorney General.
Has anyone else experienced this. It seems to me that Dish must just pocket the overcharges since they don't owe tax on money they never collected. This is a pretty nice monthly windfall for them when you consider the number of accounts involved each month. If a DIRT team member reads this could you please look into it? Seems to me if enough people would check their bill and complain, something would be done.

 

[nelson61]

I just ordered Dish Network again after a 2.5 year stint with Directv. I noticed in my confirmation email that I was being charged Sales Tax on the full amount of my bill before discounts. Since I am getting a $35/month discount, with Indiana's 7% sales tax, this amounts to a $2.45/month overcharge. Directv has never charged tax on the gross amount before discounts, only on the net amount.
I elevated this complaint to the "Office of the President's executive resolution team" to no avail. I was informed that this is the way their billing system is set up and it won't be changed. I politely said goodbye to the gentlemen I was speaking to. I then proceeded to file a consumer complaint with Indiana's Attorney General.
Has anyone else experienced this. It seems to me that Dish must just pocket the overcharges since they don't owe tax on money they never collected. This is a pretty nice monthly windfall for them when you consider the number of accounts involved each month. If a DIRT team member reads this could you please look into it? Seems to me if enough people would check their bill and complain, something would be done.

This one will be interesting. The "suits" will be scrambling and running for cover when the AG letter(s) arrives.

And, rest assured, all hell is going to break loose since Indiana will not be the only state.

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[boba]

I just ordered Dish Network again after a 2.5 year stint with Directv. I noticed in my confirmation email that I was being charged Sales Tax on the full amount of my bill before discounts. Since I am getting a $35/month discount, with Indiana's 7% sales tax, this amounts to a $2.45/month overcharge. Directv has never charged tax on the gross amount before discounts, only on the net amount.
I elevated this complaint to the "Office of the President's executive resolution team" to no avail. I was informed that this is the way their billing system is set up and it won't be changed. I politely said goodbye to the gentlemen I was speaking to. I then proceeded to file a consumer complaint with Indiana's Attorney General.
Has anyone else experienced this. It seems to me that Dish must just pocket the overcharges since they don't owe tax on money they never collected. This is a pretty nice monthly windfall for them when you consider the number of accounts involved each month. If a DIRT team member reads this could you please look into it? Seems to me if enough people would check their bill and complain, something would be done.

Don't forget who pays DIRT salaries they have to side with DISH. I think DISH will have already consulted with the states tax offices in how to apply the taxes.

 

[huskerhead]

Nm

 

[Tampa8]

I certainly don't know the law in and out, but I do know there are times when tax is supposed to be charged on the full price, and discount is off the full price, but not including the added tax. One instance is manufacturers coupons. Some states may apply the tax before discount based on what kind of discount.

It's complicated, but a "flyer" discount or offer off your bill I do believe is taxed on the whole amount because the offer is considered cash. That is different (again I believe) than a store wide discount or discount on an item. It is very possible the OP decided to notify the State before at least looking into it. It's possible the Direct TV offer was a different type of offer. The OP apparently just assumes Direct TV was right and DISH wrong.

 

[nelson61]

Your local state paper.

http://articles.southbendtribune.com/2007-12-20/news/26824121_1_sales-tax-coupon-discount

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[dare2be]

Not sure how and what states differ, but in my state, when I started receiving a Refer-A-Friend discount, my sales tax decreased accordingly on my Dish bill.

 

[Rotryrkt]

I certainly don't know the law in and out, but I do know there are times when tax is supposed to be charged on the full price, and discount is off the full price, but not including the added tax. One instance is manufacturers coupons. Some states may apply the tax before discount based on what kind of discount.

It's complicated, but a "flyer" discount or offer off your bill I do believe is taxed on the whole amount because the offer is considered cash. That is different (again I believe) than a store wide discount or discount on an item. It is very possible the OP decided to notify the State before at least looking into it. It's possible the Direct TV offer was a different type of offer. The OP apparently just assumes Direct TV was right and DISH wrong.

Thanks for all the responses. Has anyone checked their bill? Just curious. The Directv discounts were exactly the same type, promotional discounts for 1 or 2 years. That's why I switched in the first place, for the lower price. I just switched back for the same reason, D* rates are higher and discounts ended. House is wired for both, so switching is plug-and-play.
I'm no lawyer either, but my Dad was and I just found it curious that D* and E* did things differently. If I owe the tax, I'll pay it, but they need to prove to me that I do.

 

[PortlandChris]

Thanks for all the responses. Has anyone checked their bill? Just curious. The Directv discounts were exactly the same type, promotional discounts for 1 or 2 years. That's why I switched in the first place, for the lower price. I just switched back for the same reason, D* rates are higher and discounts ended. House is wired for both, so switching is plug-and-play.
I'm no lawyer either, but my Dad was and I just found it curious that D* and E* did things differently. If I owe the tax, I'll pay it, but they need to prove to me that I do.

It looks to me that the gentleman who posted the newspaper article (above) answers your question. If the coupon is issued by the manufacturer, then the customer owes sales tax on the entire price, at least that is what the article says about Indiana, your state.

Perhaps Directv does it wrong, and maybe, for the moment, you benefited from that. This is where there are auditors with tax agencies....in time this will be addressed....

 

[ZachS@DISH]

I just ordered Dish Network again after a 2.5 year stint with Directv. I noticed in my confirmation email that I was being charged Sales Tax on the full amount of my bill before discounts. Since I am getting a $35/month discount, with Indiana's 7% sales tax, this amounts to a $2.45/month overcharge. Directv has never charged tax on the gross amount before discounts, only on the net amount.
I elevated this complaint to the "Office of the President's executive resolution team" to no avail. I was informed that this is the way their billing system is set up and it won't be changed. I politely said goodbye to the gentlemen I was speaking to. I then proceeded to file a consumer complaint with Indiana's Attorney General.
Has anyone else experienced this. It seems to me that Dish must just pocket the overcharges since they don't owe tax on money they never collected. This is a pretty nice monthly windfall for them when you consider the number of accounts involved each month. If a DIRT team member reads this could you please look into it? Seems to me if enough people would check their bill and complain, something would be done.

http://www.mydish.com/support/taxes-charges This page may not directly answer your question but there is an email address at the bottom that you can direct any questions about taxes.

 

[Rotryrkt]

Thanks Zach for the reply. I already am in communication with one of the folks in the accounting department who is going to send me a breakdown of my bill with the taxable charges. I don't want to stir up a lot of trouble with this, I just want it to be done correctly and to save some money. If I am wrong, I'll be the first one back here to post that fact. And to a previous poster about the newspaper article, don't always believe what you read in the newspaper.

 

[Tampa8]

If I owe the tax, I'll pay it, but they need to prove to me that I do.

More of us probably should question when we are charged something we are not sure is correct so I don't fault you for following up on it. Because tax laws are so intricate, and then different from State to State, it's even hard to say either DISH or Direct are doing it wrong. Perhaps Direct's offer appears the same to us, but is structured differently.

 

[ncted]

I've run into similarly odd discrepancies before. Verizon charges a county tax that AT&T Wireless does not. I tried pointing this out to the county, to no avail. Suffice it to say, it is unlikely that Dish is doing it incorrectly, but anything is possible.

 

[PortlandChris]

You can also read what's stated on the state of Indiana's website about all of this. It says the same thing. I bet you may get a clearer answer talking to the state sales tax folks directly.

Contrary to what you stated, Dish does not have to prove anything, and I doubt you will get the answer you want. The Dish accounting people are not the folks you are going to reach by a customer service number and I really doubt they will even talk to you. This is akin to calling Directv and asking them why you are not paying sales tax on their charges to you. You won't get that answer either.

You can probably retain your bills and file a claim for refund directly from the sales tax agency. If Dish collected sales tax on your behalf then this is probably how you would get it back.

Good luck, but I think you are going nowhere with this.

 

[patmurphey]

Dish is not likely benefitting from this. States require merchants to pay greater of calculated or collected taxes.

 

[nelson61]

I suspect you have fallen into a marketing trap. Dish wants to protect the package price charged for all their customers and does not want them howling when the package price goes up (after end of limited time intro offer). So, they charge you and everyone else the full price on the bill and then give you a credit for the introductory offer.

From the newspaper article (earlier post):
"On the other hand, if an item for which a consumer is normally charged is added free to a package deal, sales tax can be charged for the complete value of the package. For example, McFarland said, if a restaurant is offering a free fountain drink with the purchase of a meal for a limited time, sales tax for the value of the meal -- including the drink -- can be charged. The drink is still free, but you're paying the sales tax on it."

You pay the sales tax on the total. If they so chose, they could have made the offer as a reduced package price for the introductory period and then the price would raise to what others pay . In that case, you would have not paid extra sales tax.

It's a sneaky snaky way for the state to collect more taxes and costs Dish nothing since they remit the tax to the state in both cases.

 

[Hall]

Perhaps Directv does it wrong, and maybe, for the moment, you benefited from that. This is where there are auditors with tax agencies....in time this will be addressed....

Nice to see someone looking at both sides of the issue. This is a case of Dish interpreted Indiana's sales tax ruling one way while DirecTV interpreted it a different way.

Is the presumption that Dish is collecting sales tax based on the pre-discounted price, knowing that's incorrect, and pocketing the money ?

 

[Rotryrkt]

You can also read what's stated on the state of Indiana's website about all of this. It says the same thing. I bet you may get a clearer answer talking to the state sales tax folks directly.

Contrary to what you stated, Dish does not have to prove anything, and I doubt you will get the answer you want. The Dish accounting people are not the folks you are going to reach by a customer service number and I really doubt they will even talk to you. This is akin to calling Directv and asking them why you are not paying sales tax on their charges to you. You won't get that answer either.

You can probably retain your bills and file a claim for refund directly from the sales tax agency. If Dish collected sales tax on your behalf then this is probably how you would get it back.

Good luck, but I think you are going nowhere with this.

I am in fact in direct email communication with someone who claims to be a tax accountant with Dish Network Corporate at the email address from this page: http://www.mydish.com/support/taxes-charges . I gave them my account number and he stated he would give me an accounting of taxable charges on my bill. I also asked that he cite the statutes requiring them to tax on discounts in Indiana. So far, no reply.
The fact remains that one of these companies is wrong. I'll go ahead and pay it if it comes to that because I am saving money in the long run and the bottom line is my main concern. Just don't want to pay charges (especially taxes) I don't legitimately owe. I'll post again here when I hear from the Indiana AG. I'll trust their assessment of the situation.

 

[KAB]

. I'll post again here when I hear from the Indiana AG. I'll trust their assessment of the situation.

Hope you don't think you are going to get a definitive reply any time soon...or ever. Our AG is too concerned with causing people with chronic pain, more LITTERAL pain.

 

[Rotryrkt]

Hope you don't think you are going to get a definitive reply any time soon...or ever. Our AG is too concerned with causing people with chronic pain, more LITTERAL pain.

I'll get a response, my Dad was a deputy Indiana AG.