Quick Mobile Contract Question

I can see both angles on this.  The average consumer isn't concerned about how the amount he is paying is going to be apportioned, he just wants to know what the bottom line will be without having to carry out a lot of mental arithmetic.   Hmm....   $5 flat service fee, a 2% local tax, a 3% federal tax and..... Hold on a moment, is that 3% tax added to the total or to the amount before the service fee?   Do I include the 2% local tax in calculating that?     And so on.

On the other hand, when it comes to something like the telephone bills I can understand the phone company wanting to put across a certain message -- Hey, we're not ripping you off for 50 bucks a month, we only get $30 and the rest is all these taxes and fees.    When the mandatory taxes form a substantial part of the total I can understand that.  (Imagine if the receipt you got from a British filling station said "Fuel £10, tax £30."   It might wake a few people up!)

I can see the extension of this to something like an airport car rental place where they have to pay the airport an additional fee per car and want to make it clear that the extra money is not simply an attempt to fleece people at the airport by charging more than at other locations, but a genuine extra cost incurred by doing business there.   

I agree though that some companies just use service charges and the like as an excuse to complicate the situation so that a lot of people don't realize how much they'll end up paying in total and so that they can advertise a low "sticker" price which attracts attention, then it's only when you check the small print you see the "Plus a 5% service fee for all transactions below $500 dollars," or whatever.   There's definitely a certain amount of smoke and mirrors effect here.

My contract with Verizon back in the States was for $35/mo, but when all the taxes and additional charges were added it was well over $45.  Does it work the same way here?  If a contract was for 25/month, would it actually cost 25/month or would there normally be additional charges that would need to be figured in?

Here in the UK what you sign up to pay is what you pay unless you go over your limit or make a call or text that isn't in your package...  TMobile seems to be quite flexible with what they have to offer, but I'm with Virgin 'cause they had the phone I wanted and I'd been with them for ages!  It helps to get your credit established if you're looking to stay here permanently too!  I think I pay £25 / mo for 300 minutes & texts & whatever's unused rolls over to the following month.

Good luck!

You do know that the federal telephone excise tax was declared illegal and you can claim a refund don't you?

http://www.irs.gov/newsroom/article/0,,id=164032,00.html

(Isn't that good?  The tax goes right back to the Spanish-American war and Uncle Sam is "generously" going to allow you a refund all the way back into the dim distant past of 2003.....  )

I had no idea!!! 

crabbit, if you decide to go with a contract check out the internet companies, ie Dialaphone (there's a bunch of other ones but that's who I went through).  They can have some amazing deals.
I got my Samsung D600 (t-mobile service) which was £300 at the time for free.  They put me on an 18-month contract at £33/month but had rebate payments you could get that totalled £198 back so I was only really paying £22/month.  Even better when the 18 months finished I continued at half price forever, ie £16.50/month.  This is all inclusive of VAT.  They give me 200 minutes and 100 texts free every month.

If you're a very heavy user then that might not be enough but if you want enough to talk a fair bit each month and send a fair bit of texts it's perfect.

If I tried to do the same thing on the high street or from T-mobile, Orange, Vodafone, etc directly it would have been £30-35/month without any rebates.