The U.S. Supreme Court refused to hear an appeal from Sprint in regards to a tax case brought by N.Y. claiming the carrier failed to pay taxes on consumer bills
Sprint reportedly lost its bid to have an appeal heard in a court case filed by the state of New York seeking $300 million from the wireless carrier for unpaid taxes tied to consumer billing.
The U.S. Supreme Court this week refused to hear an appeal from Sprint, which in turn left in place a lower court’s ruling that the carrier failed to pay more than $100 million in taxes from customers in New York since 2005. Sprint was claiming states did not have a say in interstate mobile phone services.
The original case was part of a whistleblower lawsuit, which allows the plaintiff to ask for up to three times the amount in damages. The case, which was initiated in 2012, alleges Sprint used a loophole in New York tax code to evade collecting taxes from consumers in a move to undercut pricing from rivals AT&T Mobility, Verizon Wireless and T-Mobile US.
“After the New York Tax Law amendments were enacted in 2002, Sprint paid sales tax on all of its receipts from its flat-rate plans,” the initial decision explained. “In 2005, however, Sprint began a nationwide program of ‘unbundling’ charges within these flat-rate monthly plans. Specifically, Sprint unbundled the portion of the fixed monthly charge that it attributed to intrastate mobile voice services, and did not collect taxes on the portion that it attributed to interstate and international calls. For the tax years at issue, the percentage of the fixed monthly charge on which Sprint collected sales tax ranged from 71.5% to 83.6%. Sprint did not separately state on customers’ bills the charges for interstate and international voice services included in the flat-rate plan.”
Sprint had previously reported in a Securities and Exchange Commission filing that the investigation had been closed on July 2, 2013, with the SEC recommending no enforcement action be taken against the company.
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