Sprint agrees to record-breaking settlement over unpaid New York state taxes

Sprint agreed to a record-breaking $330 million settlement in a New York False Claims Act litigation. The case alleges that for nearly a decade, Sprint knowingly failed to collect over $100 million in New York state and local sales taxes. This is the largest-ever single state recovery under a state false claims act.

“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 New York Attorney General Barbara D. Underwood. “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.”

The settlement comes as Sprint and T-Mobile plan to merge. The FCC, DOJ, and several states are scrutinizing the proposed merger. CWA opposes the merger as currently structured because of the competitive harms that would result from the proposed merger with little, if any, countervailing public interest benefits. The proposed merger would result in 30,000 job cuts and price increases of more than 15 percent.
 

Links:

A.G. Underwood and acting Tax Commissioner Manion announce record $330 million settlement with Sprint in groundbreaking False Claims Act litigation involving unpaid sales tax (NY Attorney General, Dec. 2018)

T-Mobile Sprint Facts (CWA, Dec. 2018)