Tax on "unbundled" price of iPhone?

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davester wrote:
... It's no different than buying a $700 piece of electronic equipment and financing it over two years.

Indeed, but I would like to know if they force you to pay tax again on the entire phone bill each month, or if the $18.75part which is phone subsidy is tax free since you already paid tax up front. can someone from those states clarify this issue? Thanks