UNITED STATES NEWS

Sprint-Nextel sued for $100M in NY sales taxes

Apr 19, 2012, 8:46 PM

Associated Press

ALBANY, N.Y. (AP) – New York Attorney General Eric Schneiderman sued Sprint-Nextel Corp. on Thursday, claiming it deliberately under-collected and underpaid $100 million in sales taxes to keep its competitive prices down.

The lawsuit in state Supreme Court was the first filed under a state law allowing the government to sue over tax losses from fraud. It could require the company to pay triple the amount it is accused of underpaying.

“We’re seeking to ensure that Sprint, not its customers, is liable for all back taxes,” Schneiderman said. His attorneys will also try to ensure in court that any affected customers can switch to other phone companies without paying early contract termination fees, which usually exceed $200.

Sprint said it collected taxes and paid “every penny” it believes its customers owe. “This complaint is without merit and Sprint categorically denies the complaint’s allegations,” spokesman John Taylor said.

Since 2002, New York tax law has required mobile phone companies to collect and pay sales taxes on the full amount of their monthly access fees for calling plans. Schneiderman said competitors Verizon, AT&T, T-Mobile, and MetroPCS pay the tax.

According to the complaint, Sprint since 2005 underpaid about 25 percent of sales taxes owed and submitted false records, all based on an in-house theory of paying no state taxes on an arbitrarily chosen interstate portion of phone service.

“New York tax law is clear. Companies must pay sales tax on the entire monthly charge,” Schneiderman said. The state sales tax is 4 percent, while most counties add another 4 percent.

The lawsuit said the amount keeps growing since Sprint has not changed its practices. It requested more than $300 million and supersedes a lawsuit filed last year by whistleblower Empire State Ventures LLC, a company Schneiderman said does investigations.

Sprint intends to stand up for consumer rights and fight the lawsuit, Taylor said. “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,” he said.

New York redrafted its law allowing the government to sue contractors and others over losses from fraud to include tax fraud in 2010, said Schneiderman, a former state senator who pushed for that measure, hoping to make the state welcoming for false claims lawyers. “We’re hoping to have more folks scrutinizing any rip-off of state and local governments,” he said.

The court will decide what portion of any settlement or award would go to the whistleblower, though that generally ranges from 15 to 20 percent, he said.

According to court papers, Sprint has about 55 million customers, including about 1.8 million wireless customers in New York. It sells wireless plans in New York through subsidiaries Sprint Spectrum, Nextel of New York and Nextel Partners of Upstate New York.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

United States News

Alyssa Milligan participates in the Bike Ride Across Wilson County in conjunction with the Tennesse...

Associated Press

New cars are supposed to be getting safer. So why are fatalities on the rise?

NASHVILLE, Tenn. (AP) — Alyssa Milligan was someone who intuitively knew when another person needed help, encouragement or a kind word. Although she was new to Tennessee, the 23-year old physical therapy student, whose mother called her “Sweet Alyssa,” had already made many close connections, especially within the tight-knit cycling community around Nashville — before […]

2 hours ago

Bridge to Calculus summer program participants, from left, Steven Ramos, Kevin Dang, Kevin Tran, Pe...

Associated Press

America’s poor math skills raise alarms over global competitiveness

BOSTON (AP) — Like a lot of high school students, Kevin Tran loves superheroes, though perhaps for different reasons than his classmates. “They’re all insanely smart. In their regular jobs they’re engineers, they’re scientists,” said Tran, 17. “And you can’t do any of those things without math.” Tran also loves math. This summer, he studied […]

3 hours ago

A no-trespassing sign hangs on a gate outside a private property, Thursday, Sept. 21, 2023, in Pomf...

Associated Press

Leaf-peeping influencers are clogging a Vermont backroad. The town is closing it

POMFRET, Vt. (AP) — Social media influencers take note: You won’t be able to snap that fall foliage selfie at a popular Vermont spot. The town has temporarily closed the road to nonresidents due to overcrowding and “poorly behaved tourists.” The normally quiet dirt road from Pomfret to Woodstock, home to the frequently photographed Sleepy […]

3 hours ago

Associated Press

With a government shutdown just days away, Congress is moving into crisis mode

WASHINGTON (AP) — With a government shutdown five days away, Congress is moving into crisis mode as Speaker Kevin McCarthy faces an insurgency from hard-right Republicans eager to slash spending even if it means curtailing federal services for millions of Americans. There’s no clear path ahead as lawmakers return with tensions high and options limited. […]

3 hours ago

FILE - United Auto Workers members walk the picket line at the Ford Michigan Assembly Plant in Wayn...

Associated Press

Biden is headed to Michigan to join the UAW picket line. He’s all-in on showing his union bona fides

WASHINGTON (AP) — President Joe Biden’s decision to stand alongside United Auto Workers picketers Tuesday on the 12th day of their strike against major carmakers underscores an allegiance to labor unions that appears to be unparalleled in presidential history. Experts in presidential and U.S. labor history say they cannot recall an instance where a sitting […]

3 hours ago

Associated Press

California governor signs law barring schoolbook bans based on racial, gender teachings

SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom signed a bill Monday to ban school boards from rejecting textbooks based on their teachings about the contributions of people from different racial backgrounds, sexual orientations and gender identities. Newsom called the measure “long overdue.” “From Temecula to Tallahassee, fringe ideologues across the country are attempting to […]

4 hours ago

Sponsored Articles

...

re:vitalize

When most diets fail, re:vitalize makes a difference that shows

Staying healthy and losing weight are things many people in Arizona are conscious of, especially during the summer.

...

Ability360

At Ability360, every day is Independence Day

With 100 different programs and services, more than 1,500 non-medically based home care staff, a world-renowned Sports & Fitness Center and over 15,000 people with disabilities served annually, across all ages and demographics, Ability360 is a nationwide leader in the disability community.

...

DAY & NIGHT AIR CONDITIONING, HEATING AND PLUMBING

Here are the biggest tips to keep your AC bill low this summer

PHOENIX — In Arizona during the summer, having a working air conditioning unit is not just a pleasure, but a necessity. No one wants to walk from their sweltering car just to continue to be hot in their home. As the triple digits hit around the Valley and are here to stay, your AC bill […]

Sprint-Nextel sued for $100M in NY sales taxes