When I get a device replaced through express replacement, do I have to pay the taxes on the device?

My iPhone 14 PM is buggy since I had it 2 months ago and after trying everything that support told me to do, the next step was to get a replacement. The agent told me that there would be an authorization hold of about $1209 (including tax, $29 fee waived) and that when the old device was received by Apple I would only get the price of the phone ($1099) dropped of the authorization and the rest (tax of about $110) I would be responsible for.

Can anyone confirm this? Doesn't make sense why I would have to pay taxes for a device I am getting replaced through warranty. The agent also couldn't provide any documentation regarding this.

Here is an example from Reddit. In this scenario, what I understand is that I would have a hold of $1129.15 but when Apple receives the old device they would still hold the tax of $99.41 and refund the rest.