New York Attorney General Eric Schniederman files lawsuit against Sprint Nextel for failing to pay taxes – Part 2

“This complaint is without merit and Sprint categorically denies the complaint’s allegations,” the company said in a statement. “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.”

Despite the statements from the cellphone carrier, all signs point to their wrongdoing in this particular case. According to sources, the company failed to report the collection of sales tax and aggravated the situation by submitting false reports to the taxation departments both at Federal and state levels. Sprint concealed this practice from taxing authorities, its competitors, and its customers. The scheme, which he said continues today, costs New York about $210,000 every week, and more than $30,000 a day.

With a number of new smartphones, both Android and Windows Phone-based in the pipeline and the release of the new iPhone in the fall, such a penalty, if proven guilty, would set Spring back a couple of million dollars at least. Sprint is already incurring losses for some time now and the likes of AT&T and Verizon spare no mercy in both 3G and 4G network competitions. The latest controversy will surely set the company back in the race. Some speculations are that the company might lose most of its market share to their foes in the US.

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Posted by Usman Khalid on Apr 20 2012. Filed under USA, World. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.