Yesterday we brought you news that the state of New York had filed a $300 million lawsuit against Sprint for tax fraud. The suit alleges that Sprint did not properly collect and pay sales taxes on their wireless access fees. According to the suit, Sprint deliberately evaded paying $100 million in sales taxes in order to keep prices lower and maintain a competitive edge. This is the first lawsuit filed under New York’s False Claims Act, a bill created by New York Attorney General Eric Schneiderman. Under the provisions of the law, Sprint is liable for three times the amount of the alleged fraud: $300 million.
After our story ran yesterday, a representative from Sprint contact WebProNews to discuss Sprint’s response to the allegations. Here’s what Sprint spokesman John Taylor had to say:
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.
So, it looks like Sprint is prepared to go to court over this. With the suit only just filed yesterday, there’s a long way to go before anything is decided. We’ll continue to cover the suit as it develops in the coming months.