Sprint reaches $330 million settlement with New York over failure to pay taxes for wireless plans

By Marian Johns | Dec 26, 2018

ALBANY — Sprint Communications, accused of failing to collect and turn in more than $100 million in state and local sales taxes for its wireless plans in New York state, has agreed to a $330 million settlement, according to the state Attorney General's Office. 

The settlement resolves a lawsuit filed by the New York Attorney General's Office and the state's acting tax commissioner alleging Sprint violated the False Claim Act by selling wireless plans that allowed a certain number of minutes for a "flat-rate monthly charge" with no difference between intrastate and interstate calls, the office said.  The lawsuit stems from a whistleblower report and resulted in the largest False Claims Act lawsuit settlement, according to state Attorney General Barbara Underwood. 

“Sprint knew exactly how New York sales tax law applied to its plans – yet for years the company flagrantly broke the law, cheating the state and its localities out of tax dollars that should have been invested in our communities,” Underwood said in a statement.  “Now Sprint will pay the price with this record-setting settlement."

“By blatantly understating the amount of sales tax owed to the tune of $100 million, Sprint violated the trust of its customers and deprived communities across New York state of revenue needed for vital services,” added acting commissioner of taxation and finance Nonie Manion.  “We applaud the whistleblower who brought this injustice to light, and our colleagues at the Attorney General’s Office who worked closely with us on the investigation that led to this record-setting settlement of $330 million.”

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