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New York sues Sprint for $300 million over alleged tax fraud [updated]

Dan Graziano
April 19th, 2012 at 11:40 AM

New York on Thursday filed a lawsuit against Sprint Nextel Corp looking to collect more than $300 million, Reuters reported. The wireless company is accused of tax fraud for deliberately not collecting or paying more than $100 million in taxes over the past seven years. New York Attorney General Eric Schneiderman filed the complaint in the New York State Supreme Court on Thursday. The tax suit, which is the first filed under the state’s False Claims Act, could require Sprint to pay triple the amount it is accused of underpaying. Since 2002, New York state has required mobile phone companies to collect and pay sales taxes for their mobile services. Schneiderman claims Sprint has underpaid and submitted false records since 2005, however, in an alleged effort to undercut its competition and offer cheaper rate plans.

UPDATE: Sprint has issued a statement, which can be found after the break.

“This complaint is without merit and Sprint categorically denies the complaint’s allegations. 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. 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. We intend to stand up for New York consumers’ rights and fight this suit.”


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