New York State sued Sprint for $300 million on Thursday in a tax fraud case. The state is arguing that Sprint purposely avoided collecting and paying taxes related to its wireless services, Reuters explained. Sprint reportedly did not charge its customers for more than $100 million during the span of seven years.
It’s unclear why the carrier chose not to do so, since most carriers add tax charges into a customer’s monthly bill where they are automatically deducted.
The lawsuit was filed by New York Attorney General Eric Schneiderman in the New York State Supreme Court. It is reportedly the first tax enforcement move under New York’s False Claims Act.
“The False Claims Act is the single most important tool U.S. taxpayers have to recover the billions of dollars stolen through fraud by U.S. government contractors every year,” the group’s website explains. However, the Taxpayers Against Fraud website also says that the law “explicitly excludes tax fraud,” so it’s unclear what angle Schneiderman will take in his case.
UPDATE: Sprint provided TechnoBuffalo with 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.”