Legal Question in Business Law in California

TAX on Purchased Items

Dear Lawyer,

I recently purchased an item on the internet. The item was originally $400 but they were selling it for $99. When I purchased it, they charged me $99 + TAX of $400. Is this legal? Are they allowed to charge me the tax amount of $400 when I'm purchasing a $99 discounted version?

The web site I purchased it from had nothing regarding this.

Also they said Shipping was FREE ($25 Value), and on the bottom of the web site it said that it would be shipped UPS Ground Delivery, but it was shipped with normal postal service with no security or insurance. Is this legal?

Thank you for your time. It is appreciated.


Asked on 7/23/02, 5:30 pm

2 Answers from Attorneys
Jeff Lambert Attorney at Law

Re: TAX on Purchased Items

Based on the facts you provided, it appears that you have an actionable claim against the owner of the website on a variety of grounds. The question that usually arises in the internet commerce context is whether you can get at the company to satisfy your claim. If you are so motivated, I recommend you seek out a free consultation with an attorney in your area to get a legal analysis of all the facts present and an evaluation of your options and legal rights. You may have a very good case against this company for damages and penalties.

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Answered on 7/23/02, 6:40 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: TAX on Purchased Items

Do you mean tax of $400 or tax ON $400? This would seem to make a big difference.

For transactions within California, the proper tax is the percentage of the actual selling price at the point where title is transferred. For most electronic transactions, the terms call for buyer to take title at the seller's location. Therefore, if you buy from someone in Sonoma County, you'll pay its tax rate of 7.25% on the actual selling price.

Anyone who tries to collect sales tax based upon a theoretical 'list price' rather than the actual selling price is trying to rip you off.

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Answered on 7/23/02, 6:45 pm


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