The state of New York is suing Sprint for over $300 million, claiming that Sprint deliberately committed tax fraud by not collecting or paying millions of dollars in taxes for its service in the state. According to Reuters, Sprint has failed to collect the requisite tax for 7 years. $300 million represents three times the amount underpaid, plus penalties.
The state of New York is arguing that Sprint openly decided to not collect taxes as a means of undercutting Verizon and AT&T. Sprint offers one of the cheapest rate plans of the major 4 wireless carriers.
The case will be tried in the New York Supreme Court, and is the first tax enforcement filed under New York’s False Claims Act. No court dates or further details on the case have been provided. We’ll be watching this one closely as it develops, as it could have significant impacts on Sprint’s business model.