On Thursday, the State of New York filed a lawsuit against Sprint Nextel Corp and is looking to collect more than $300 million according to a report from Reuters. The carrier has been accused for tax fraud in that it deliberately did not collect or pay more than $100 million in taxes over the course of the past 7 years. Eric Schneiderman, New York Attorney General filed the claim in the New York State Supreme Court.
If found guilty under the tax suit which is the first filed under New York’s False Claims Act, Sprint might be forced to pay triple the amount of what it has been accused of not paying which totals up to an excess of $300 million reportedly. According to Schneiderman, Sprint has underpaid and submitted false records since 2005 in order to provide cheaper rate plans and also to undercut its competing carriers like AT&T, Verizon Wireless and T-Mobile.
According to the laws in New York, mobile carrier companies are required to collect and pay sales taxes for their services and if Schneiderman’s claims are accurate, Sprint has not been doing so.
In response to the lawsuit, the carrier has come out and released a statement which says, “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.”