The suit alleged that Sprint failed to collect and remit sales tax and other local taxes when it rang up flat rate wireless plans sold to New Yorkers. The carrier did not collect these taxes for a period of approximately ten years. A whistleblower kicked off this action by filing a suit under the New York False Claims Act back in 2011. That particular person will collect $62.7 million under state law.
The press release goes on to state that while Sprint’s in-house attorneys and lobbyists knew that they needed to collect and remit the taxes on these plans, the company decided in 2005 to stop collecting taxes on the portion of the aforementioned flat rate wireless plans that it “arbitrarily deemed to be for interstate calls.” Sprint did not start following the law until May 2014.
The carrier is now awaited FCC and FTC approval to be merged into T-Mobile. The deal is expected to close during the first half of 2019.