The New York attorney general has filed a "first-of-its-kind" tax fraud lawsuit against Sprint Nextel, claiming the operator deliberately under-collected and underpaid millions of dollars in New York state and local sales taxes on flat-rate access charges for mobile calling plans. Sprint said it categorically denied the allegations and said the complaint was without merit. The attorney general wants Sprint to pay three times its underpayment of over USD 100 million, plus penalties if found liable. The attorney general's statement said that all of Sprint's major mobile competitors, including Verizon, AT&T, T-Mobile, and MetroPCS, have followed the law regarding these taxes. 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. Sprint is accused of repeatedly and knowingly submitting false records and statements to New York State tax authorities; it also did not correct its sales tax practices when it was informed of its illegality. The attorney general's lawsuit is the first ever tax enforcement action filed under the New York False Claims Act. Sprint responded to the lawsuit by saying that it has "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."
