Mobile

New York vs. Sprint: State sues for $300M over unpaid taxes (updated)

New York Attorney General Eric Schneiderman announced this morning that the state has filed suit against Sprint Nextel for more than $300 million over tax fraud concerns.

He claimed that Sprint deliberately failed to charge customers more than $100 million in wireless service taxes over a period of seven years, Reuters reports. Schneiderman said this was the first case filed under New York’s False Claims Act.

The suit, which was filed this morning in the New York State Supreme Court, calls for three times the amount underpaid by Sprint, plus additional penalties. Schneiderman claimed that the move by third-place Sprint was a way to snatch customers from rival carriers. He’ll be taking over a whistle-blower lawsuit originally filed in New York in March 2011.

Sprint just announced its first LTE 4G devices, the Evo 4G One, Galaxy Nexus, and LG Viper, ahead of the launch of its LTE network this summer. The company is moving quickly to deploy LTE to catch up with Verizon and AT&T, after spending hundreds of millions on its slower WiMax 4G network.

It’s unclear if this lawsuit will affect Sprint’s future plans, but the carrier certainly can’t afford a delay, especially since it likely won’t receive the new iPhone without an upgraded network.

Update: Sprint has issued a statement denying the allegations:

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.

Image via Consumerist on Flickr


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