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New York sues Sprint for over $300m
20 April 2012
US operator Sprint faces lawsuit from New York state as attorney general claims it failed to pay sales taxes
New York’s attorney general Eric Schneiderman is threatening to sue Sprint for over $300 million, alleging the company did not pay sales taxes for seven years. Schneiderman referred to a March 2011 whistle-blower lawsuit in New York, and intends to demand from Sprint three times the alleged underpayment, which amounted to over $100 million plus penalties.
He claims that Sprint did not collect and pay certain sales taxes on flat-rate access charges for wireless calling plans, due to which local and state governments lost over $100 million, reported Bloomberg, citing Schneiderman, a politician who was elected attorney general for the state in November 2010.
Sprint said it intends to fight the lawsuit. John Taylor, a spokesman for Sprint, told Bloomberg: “We have collected and paid over to New York every penny of sales taxes on mobile wireless services that we believe our customers owe under New York state law. The attorney general’s office is claiming New York consumers, who already pay some of the highest wireless taxes in the country, should pay even more.”
Schneiderman told Bloomberg: “This case represents a new era in tax fraud prosecutions. The deliberate failure to collect or pay your fair share of taxes will not be tolerated in New York state.”
Schneiderman said wireless operators selling a particular number of minutes of calling time for a fixed monthly charge are supposed to collect and pay sales taxes on the entire charge, but Sprint considered a part of this non-taxable and retained around 25% of the taxes due. GTB
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