Print 17 comment(s) - last by euclidean.. on Jul 9 at 8:30 AM

Sprint plans to file an appeal

Sprint is in hot water due to unpaid sales taxes, and the carrier is looking at a $300 million lawsuit. 

A lawsuit,  which claimed that Sprint didn't collect or pay taxes properly on wireless calling plans, was filed in New York back in 2011. This cost both local and state governments over $100 million. 

More specifically, wireless carriers are supposed to collect and pay sales taxes on the entire charge for the amount of minutes they sell for fixed monthly wireless plans. Instead of doing this, Sprint dubbed a portion of it as nontaxable and failed to collect about 25 percent of the taxes due to governments. 

New York Attorney General Eric Schneiderman took over the case last year, and now wants $300 million to cover the $100 million lost by state/local governments and for penalties. He said this should be a warning to others that tax fraud will be punished in the state.

“Sprint is disappointed in the court’s decision, and we intend to file an appeal shortly,” said John Taylor, a spokesman for Sprint. “With this lawsuit, 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. As we have in the past, we will continue to stand up for New York consumers’ rights and fight this suit.”

New York Supreme Court Judge O. Peter Sherwood denied Sprint's request to dismiss the case on June 27. Another hearing is scheduled for July 24.

Sources: Bloomberg, CNET

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Why the heck didn't Sprint just pay their taxes?
By Wolfpup on 7/2/2013 4:07:29 PM , Rating: 3
And why are they trying to weasel out of it now? I mean this is all stuff that they pass on to consumers anyway, so even by psychopathic corporation standards I don't see the point.

RE: Why the heck didn't Sprint just pay their taxes?
By Samus on 7/2/2013 9:16:10 PM , Rating: 2
Considering how confusing state and local excise taxes are (they vary by state, county and cities within counties...) I'm not surprised this doesn't happen more often.

Sprint probably thought they were collecting taxes properly. Unfortunately ignorance doesn't work as an excuse in a court of law.

RE: Why the heck didn't Sprint just pay their taxes?
By BRB29 on 7/3/2013 12:43:44 AM , Rating: 2
ignorance doesn't work as an excuse

like how their unlimited plans are not unlimited and they just boot you if you used too much data.

By Solandri on 7/3/2013 4:33:45 AM , Rating: 2
Where did you hear that? I'm on a Sprint unlimited data plan and have never been throttled, cut off, nor received a warning. Other Sprint users have posted monthly statements showing more than 50 GB of data usage, with no complaints from Sprint.

T-Mobile's unlimited OTOH is unlimited up to 2 GB (maybe 5 GB?), after which they throttle you.

RE: Why the heck didn't Sprint just pay their taxes?
By BRB29 on 7/3/2013 7:51:25 AM , Rating: 1
Google it yourself. I know people who keeps getting kicked off the network or slow to a crawl after they reach a certain amount of data. But don't believe my words, I'll just let the CEO speak for himself.

For those that want to abuse it, we can knock them off," [Sprint CEO Dan] Hesse said at an investor conference Thursday. He said Sprint pares back data use for about 1% of users, a practice known as throttling.

Right....because their "truly unlimited data" is not truly unlimited

and their ads say this
"You'd be shocked how much data you use in a month," Sprint asks in a recent television advertisement. "What happens if you go over? With Sprint, you don't have to worry; only Sprint offers truly unlimited data."

Then they try to correct themselves with BS like this
The throttling only applies to customers who use excessive data while roaming on partnered networks -- "a guy in his house in rural Montana" for example. Sprint's fine print notes the carrier will begin throttling after 300 MB of "off-network" data usage.

it still looks bad so they tried again and failed again
Sprint has now clarified the situation with a blog post indicating the carrier does not throttle any customer's data usage, even for those with excessive roaming usage. The carrier does, however, have terms in place that permit it to terminate the contracts of users with heavy roaming usage, and it attempts to reach out to those customers and work with them before terminating their contracts.

Lesson: Don't sell unlimited data if you don't freaking honor it. They call it abuse, I call it using what you paid for.

you can find a heaping pile of complaints about Sprint in almost every category. Everything from constant incorrect billing to limited unlimited data.

By Camikazi on 7/3/2013 8:14:51 PM , Rating: 2
Man I love still having actual unlimited 4G on Verizon.

By mcnabney on 7/4/2013 12:29:28 PM , Rating: 2
My wife still has unlimited 4G LTE on Verizon. It is very sad - she only uses between 1-2GB a month...

By euclidean on 7/9/2013 8:30:24 AM , Rating: 2
I can only provide personal experience, and can vouch that I've never been kicked or throttled as well. While I do agree with you - unlimited should be unlimited - there is still fine print when you sign up for service.

Specifically: 3G Data caps at 5GB, 4G is 'truly' Unlimited. All of this applies to their network, and if you go over a certain percentage of total service (I believe it's somewhere near 35%, to lazy to look it up) off of Sprints Network, then they kick/throttle/etc. In fact, it's also a clause for them to terminate your contract all together - while their service area is larger than AT&Ts, a lot of that is made up with Roaming agreements, which cost them more to operate than their own networks.

By marvdmartian on 7/3/2013 8:10:02 AM , Rating: 2
New York Attorney General Eric Schneiderman took over the case last year, and now wants $300 million to cover the $100 million lost by state/local governments and for penalties.

Typical NY, always seeking to take advantage of a situation, to get more than they deserve!

Back when I was in the military, I got to enjoy a vacation from NY state taxes, so long as I didn't reside in the state for more than 30 days a year (many states do this for their military members).
The last year that I had to pay taxes, I got the forms, filled them out, did the math, and figured out I owed the state of NY $32 more than what had been deducted from my check. So I went to the post office, got a money order for that amount, and sent it off with my return, figuring I was good to go.
A couple months later, I get a very official looking piece of mail from NY state, with a letter inside. The letter tells me that I owed the state more money, and if I didn't pay immediately, I could be subject to up to 10 years in prison and/or tens of thousands of dollars in fines! Holy cow! How much more did I owe them, for them to make threats like this??

TWO DOLLARS. Yep, I had done the math incorrectly, and owed them $2 more than I thought I did. Chances are, it cost them more to figure that out, print the letter off, and send it to me, then process the payment once it was sent, than the extra $2 they got out of me.

That's a big part of the reason why I am SOOOOOOO glad I don't live in that state any more!!

By ProZach on 7/3/2013 4:47:57 PM , Rating: 2
Ah, but they could make so much more money from prison labor from these petty pennies.

But seriously, you are probably right about their administration spending well over $100 in labor costs to send a scary demand letter. Guess someone there wants to keep his/her job.

Typical NY, always seeking to take advantage of a situation, to get more than they deserve!

I figured they were pursuing treble damages. If I'm not mistaken, they would claim Sprint committed wrongdoing with intent.

By Reclaimer77 on 7/3/2013 2:42:01 AM , Rating: 3
Sprint paid "their" taxes.

Read the article again. Sprint was supposed to collect some arbitrary BS New York leftist porkbarrel tax from it's customers. Apparently according to this fatcat bureaucrat, Sprint didn't properly apply the tax so New York had a bit less money that they otherwise would have used to flush down the cesspool of corruption and greed that is New York.

Translation: Because of this, your bill was less than it should/would have been. Does that sound "psychopathic" to you?

By gamerk2 on 7/3/2013 3:05:43 AM , Rating: 2
Uh, no, on both counts.

On the first: Sprint's been trying to weasle out of paying their taxes for years, and after all that money Verizon has dumped into the city, or the Dolans (Cablevision/MSG) influence, no way they were getting away with it.

On the second: As a NYker, I expect a certain level of service. I expect the best education system in the US. I expect the best hospitals. The cleanest city. And so on and so forth. And we get it. And when we find out some bureaucrat wasted money, we get 8 newspapers with frontpage headlines, and about 5 different layers of government trying to figure out who's to blame. Sure, it costs a lot, but we get more then enough back in services (education and the like) and salary (average pay: $80k, well above the national average) more then put us ahead of everyone else in the country.

By Solandri on 7/3/2013 4:40:28 AM , Rating: 2
On the first: Sprint's been trying to weasle out of paying their taxes for years

That's his point - Sprint didn't weasel out of anything here. Whether they collected this tax or not makes no difference to their bottom line. Just look at your monthly cell phone bill. They'll charge you $59.99/mo or whatever for service. Any taxes are added on top of that. So Sprint doesn't pay anything here. If the tax is legit, the customers pay.

For whatever reason, Sprint didn't think the tax was legit or thought they were collecting it correctly. So the amount in dispute represents money Sprint's customers didn't pay, not money Sprint is trying to weasel out of and keep for itself.

RE: Why the heck didn't Sprint just pay their taxes?
By Mint on 7/3/2013 12:02:50 PM , Rating: 2
Whether they collected this tax or not makes no difference to their bottom line.
It let them charge less tax than competitors. If one of their customers called AT&T or T-Mobile about switching over and what their bill would be after all taxes, they'd give him a higher quote.

It's like a store advertising "we pay the taxes" to draw customers and get more sales, but in the end they still have to pay sales tax. They just reduce the price by the right amount so that when taxes are added, you get the original price.

By Reclaimer77 on 7/3/2013 12:19:59 PM , Rating: 2
Are you an idiot? Nobody includes taxes in a data plan quote!

The lengths you're going to make Sprint look villainous are absurd. We should cheer any example where the tax burden was reduced. Right or wrong, legal or illegal.

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