A.G. Schneiderman Files Groundbreaking Tax Fraud Lawsuit Against Sprint For Over $300 Million
Attorney General Eric T. Schneiderman today filed a first-of-its-kind lawsuit against Sprint-Nextel Corp. for deliberately under-collecting and underpaying millions of dollars in New York state and local sales taxes on flat-rate access charges for wireless calling plans. ..... Since 2002, New York Tax Law has required mobile phone companies to collect and pay sales taxes on the full amount of their monthly access charges for their calling plans. For example, when a customer pays Sprint a fixed monthly charge of $39.99 for 450 minutes of mobile calling time, the law requires Sprint to collect and pay sales taxes on the entire $39.99.
According to the Attorney General's complaint, starting in 2005, Sprint illegally failed to collect and pay New York sales taxes on an arbitrarily set portion of its revenue from these fixed monthly access charges. To carry out this plan, Sprint repeatedly and knowingly submitted false records and statements to New York State tax authorities. Sprint concealed this practice from taxing authorities, its competitors, and its customers. ------ rest (PDF):