Sprint to pay $330M in settlement with New York attorney general over unpaid taxes

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Sprint will pay $330 million under the settlement. (iStockPhoto)

New York Attorney General Barbara Underwood announced Sprint will pay a record-breaking $330 million settlement for allegedly failing to collect and remit more than $100 million in state and local sales taxes.

“The $330 million recovery is not only the largest-ever recovery by the New York Attorney General resulting from an action filed under the New York False Claims Act, but it is the largest-ever recovery by a single state in an action brought under a state false claims act,” the New York attorney general said in a release.

“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,” said Underwood in a release. “Now, Sprint will pay the price with this record-setting settlement. This should serve as a clear reminder that the New York False Claims Act protects New Yorkers from companies that attempt to flout their obligations under New York tax law.”

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A Sprint spokesperson said the operator is pleased with the settlement, although the operator disagrees with the state’s characterizations. The spokesperson said Sprint believes resolving the matter is in the best interest of the company.

The issue stretches back to 2012, when Sprint was sued for more than $300 million by the New York attorney general, who alleged Sprint had deliberately underpaid state sales taxes for seven years to keep its prices down. Sprint suffered a number of setbacks in the case over the years, including a ruling from an appellate court in 2014 and one in 2016 when the U.S. Supreme Court declined to hear Sprint’s appeal.

Interestingly, the settlement also distributes $62.7 million to the whistleblower involved with the case. Law firm Menz Bonner Komar & Koenigsberg said its client, Empire State Ventures, LLC, will receive the $62.7 million.

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