Sprint has been slapped with a $300 million lawsuit by New York state for tax fraud, the NY attorney general’s office announced Thursday. The carrier allegedly submitted false records that allowed it to underpay taxes, in the interest of keeping its monthly charges low to “obtain an advantage over its competitors.”
While Sprint doesn’t top the charts for customer satisfaction, it has long offered cheaper service plans than its larger competitors: AT&T and Verizon. According to Eric Schneiderman, NY attorney general, Sprint failed to correctly collect and pay taxes on the monthly access charges its customers paid. “Sprint concluded that this practice would position its calling plans as cheaper than competitors’ plans by $4.6 million per month, collectively, because of sales taxes not collected and paid,” states the attorney general’s press release.
Schneiderman asserts that Sprint’s competitors, including Verizon, T-Mobile, and AT&T, have all managed to pay their taxes correctly. Sprint is the holdout. According to the attorney general’s math, Sprint’s underpayment of taxes is increasing by $30,000 each day.
The statement goes on to say that the lawsuit will attack Sprint for the taxes owed, not its customers. It was the company that allegedly failed to correctly collect the funds and pay the state. Reached for comment, a Sprint representative gave the following statement:
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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Sprint hit with $300 million lawsuit for tax fraud in New York
