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Cell Phones Taxes

Springfield, MA: (Sep-27-07) The city of Springfield brought a lawsuit against Sprint Nextel Corp., over the collection of business license gross receipts tax. The city filed two separate lawsuits, one in US District Court in Jefferson City in May 2004, naming SBC, Sprint, Alltel, Cingular and Nextel as defendants, and the other in Greene County Circuit Court naming Sprint as a defendant. Since that time, Sprint has merged with Nextel to create Sprint Nextel Corp. SBC acquired AT&T, which now owns Cingular. It is known as AT&T Mobility.

As part of an agreement reached, Springfield and Sprint Nextel Corp. have reached an out-of-court settlement to end the lawsuits. Sprint Nextel will pay the city of Springfield $2.375 million in back taxes and will pay the gross receipts tax on wireless service effective Oct. 1, 2007. Currently, the city collects about $2.5 million a year from this tax, which goes into the General Revenue Fund. About 30 telephone companies currently collect and remit this tax, which has been in place since 1946. The companies are allowed under federal law to pass the tax along in the form of a surcharge to their customer. [NEWS LEADER: CELL PHONE TAXES]

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Published on Sep-30-07


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