Sprint Hit with $300 Million Lawsuit for Alleged New York Tax Fraud
July 2, 2013 2:53 PM
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.
"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer
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