1. Hi Guest, welcome to the help forum. You can get fast answers to your customer service questions here. We have a dedicated team of advocates who are ready to help. Just go to the section that matches your question and ask us!
    Dismiss Notice
  2. If you've posted a question or issue for our advocates to assist with, please be sure to check back frequently for responses and requests for clarification.
    Dismiss Notice
  3. Did you know you can get email notifications when something new posts to your favorite forum? It's easy. Just click the "watch" link right next to the "post new thread" button at the top of your favorite forum. The rest is easy. Now you'll never miss another conversation.
    Dismiss Notice
  4. Want to become an expert user? Drop by the How to use this forum section and all will be revealed. We'll show you how to make the most of your experience.
    Dismiss Notice

Is There Tax on Insurance Premiums?

Discussion in 'Insurance' started by Dan P, Nov 16, 2016.

  1. Dan P

    Joined:
    Jul 18, 2016
    Messages:
    26
    Likes Received:
    13
    I own a NordicTrack treadmill. It's much more convenient to run at home than it is to pack up and go to a gym.

    To make sure my machine is in working order I have an insurance plan with NordicTrack, a plan provided by National Product Care Company (administered by Universal Technical Service---UTS--- 800-677-3838).

    The insurance plan mail me a renewal offer for $176.67 for one year. I accepted and renewed using my credit card with their special code number.

    Instead of getting a bill for $176.67 my bill on the credit card was $192.79.

    Since the numbers didn't match I called 877-883-0921 and asked about the bill. I was told they numbers didn't match because tax had been added. I have never heard of tax on an insurance premium. Can that be possible? Is NordicTrack (National Product Care Company) milking the general public or is the tax on insurance premiums for real?

    What's your desired resolution? Extra funds back and hopefully extra funds back for all consumers who were inappropriately billed---if we were.

    What's the value of your claim (in US $)? 16

    Date of transaction/travel date: 17 Sep 2016
     
    #1
  2. JVillegirl541

    Staff Member Advocate

    Joined:
    Nov 21, 2014
    Messages:
    3,120
    Likes Received:
    2,974
    Wow! Good question, let's start with what state you live in.... we can check this out. Sounds shady to me but I'm not an expert in this area.
     
    #2
  3. Dan P

    Joined:
    Jul 18, 2016
    Messages:
    26
    Likes Received:
    13
    I live in California
     
    #3
  4. Michelle Friedman

    Michelle Friedman Advocacy & Editorial Director
    Staff Member Advocate

    Joined:
    Sep 19, 2015
    Messages:
    451
    Likes Received:
    848
    @Dan P Is this an Optional extended warranty? I do not think that extended optional warranties are taxable in California. Look up "Publication 119" it states that Mandatory warranties are taxable , but optional extended warranties are not.

    "An optional warranty or maintenance agreement is a contract your customer may choose to purchase for an additional charge. If your customer can buy the product without buying the warranty from you, the warranty is optional. Separate charges for optional warranties are generally not taxable. "
     
    #4
    Tanya, Patina and JVillegirl541 like this.
  5. JVillegirl541

    Staff Member Advocate

    Joined:
    Nov 21, 2014
    Messages:
    3,120
    Likes Received:
    2,974
    #5
    Neil likes this.
  6. Dan P

    Joined:
    Jul 18, 2016
    Messages:
    26
    Likes Received:
    13
    I've looked up California Publication 119 In the State Board of Equalization and this is what it says:

    Optional warranties
    An optional warranty or maintenance agreement is a contract your customer may choose to purchase for an additional charge. If your customer can buy the product without buying the warranty from you, the warranty is optional. Separate charges for optional warranties are generally not taxable (exception: see Optional software maintenance agreements below). Examples of optional warranties include an extended repair warranty for a computer or electronic device, an extended mileage warranty for a car, and a service plan for a refrigerator.

    Example: Your car dealership sells a used car for $10,500. You offer the customer the option to buy an extended, 18-month warranty for an additional $500. The customer can buy the car without the warranty. If the customer buys the car and the optional warranty, tax would apply to the $10,500 charge for the car but not to the $500 charge for the warranty.

    I am speaking with them right now. The agent tells me the difference is tax. When I quoted Proposition 119 he put me on hold. I'm still waiting.
     
    #6
  7. Dan P

    Joined:
    Jul 18, 2016
    Messages:
    26
    Likes Received:
    13
    I was just informed that they are going to reimburse me the $16 smackeroos. I told them they need to send me a letter saying that they wrongly dinged other California customers and that they too will be reimbursed.

    It's not merely my $16 it's everybody's who's be wrongly charged. We'll see if that letter ever comes.
     
    #7
    Neil, sas80 and Patina like this.
  8. mmb

    mmb

    Joined:
    Jan 20, 2015
    Messages:
    674
    Likes Received:
    746
    Don't hold your breath on that and don't expect anyone in CA Tax Dept to care enough about this to do anything.
    Look at it this way. CA is benefitting from this IF the vendor is remiting the tax to them And, if they are not they STILL won't care what is going on. None of their business is their attitude.
    Son recently told me a story like this that involved CA company collecting unwarranted tax and he got nowhere reporting it.
     
    #8
  9. ORresident

    Staff Member Advocate

    Joined:
    Nov 3, 2015
    Messages:
    530
    Likes Received:
    652
    Dan, when you get that letter, send a copy of it and your story here to the California Board of Equalization and California Consumer Affairs and let them know what happened.

    I suspect someone is going to be interested in this story.... Great catch!
     
    #9
    Neil likes this.
  10. Dan P

    Joined:
    Jul 18, 2016
    Messages:
    26
    Likes Received:
    13
    Thanks MLT,

    After informing them about California Publication 119 they responded with this: "Hello this is Shane from the UTS warranty dept. I had spoken to you over the phone and you had brought to our attention that you were incorrectly charged tax on a renewal warranty that you had purchased from us. We will send you a check for $16.12. You should receive the check by next week. I have made the management here aware of the situation and they will do what they can to make sure the situation does not happen again."
     
    #10
    Michelle Friedman likes this.
  11. Michelle Friedman

    Michelle Friedman Advocacy & Editorial Director
    Staff Member Advocate

    Joined:
    Sep 19, 2015
    Messages:
    451
    Likes Received:
    848
    @Dan P : You are very welcome .

    I just sent an email to the writers here. I certainly think this is a worthwhile story to bring to the attention of other consumers.
     
    #11
    Patina likes this.
  12. Carrie Livingston

    Staff Member Advocate

    Joined:
    Jan 6, 2015
    Messages:
    396
    Likes Received:
    460
    I don't know California's rules regarding refunds but in Missouri if a taxpayer requests a refund due to over-charging tax or for collecting tax that wasn't due, they are not required to return the refund to the customer.

    They will likely be interested since they would like to put the company on notice they cannot seek a refund for this and should not be collecting tax on this.
     
    #12
  13. Neil

    Neil Moderator
    Staff Member Advocate

    Joined:
    Dec 27, 2014
    Messages:
    9,199
    Likes Received:
    9,681
    What great researchers here and Dan, I think you should bring this up to the State because how many others have been improperly taxed by this company? You might even want to contact one of your local news stations that do Consumer Alert stories.

    This is one of the best stories I have seen here where $16 may find thousands of others who have been improperly taxed.
     
    #13
    jsn55 likes this.

Share This Page