Sprint sued for $300m by New York over tax fraud allegation
updated 01:05 pm EDT, Thu April 19, 2012
Sprint sued for not paying tax for seven years
The New York attorney general's office has filed a sued against wireless carrier Sprint that seeks over $300 million for allegedly not paying sales tax in the state for seven years. The third-largest US carrier is accused of deliberately failing to collect and pay sales taxes on flat-rate access charges for its wireless calling plans, according to a Thursday report. This practice cost state and local government over $100 million, read a statement from New York Attorney General Eric Schneiderman.
The company is said to have "repeatedly and knowingly" given false statements to New York tax authorities by the attorney general. Schneiderman also said he took over a whistleblower lawsuit filed in New York in March 2011 and is seeking three times the amount of Sprint's underpayment that includes penalties.
Sprint hadn't publicly responded to the accusation as of mid-Thursday.
If found responsible, Sprint could see some of its existing financial troubles compounded. The network has been posting continued, steeper losses and would see money disappear that could be used to build out the network or mitigate its shortfall.
Update: Sprint in a statement said the lawsuit was "without merit" and said it had paid "every penny" of sales tax that it understood customers owed in New York State. The carrier portrayed itself as a champion for the public, arguing that the state Attorney General thought customers "should pay even more" than they did for tax.
