AT&T Unit to Pay Up to $76 Million To Settle Tax Lawsuit With Missouri

AT&T UNIT TO PAY UP TO $76 MILLION TO SETTLE TAX LAWSUIT WITH MISSOURI
[SOURCE: Wall Street Journal, AUTHOR: Sara Silver at sara.silver@wsj.com]
AT&T Mobility, a division of AT&T Inc., agreed to pay as much as $76 million in back taxes and legal fees to settle a six-year-old cellphone-tax lawsuit with Missouri's municipalities. The dispute is over whether municipalities can levy a tax normally applied to utilities and traditional "landline" phone companies on cellphone service. The suit had sought $500 million in back taxes, penalties and interest. The resolution follows Verizon Wireless's decision in September to settle the same suit, filed in December 2001 by Missouri municipalities against wireless carriers operating in the state. Sprint Nextel Corp., also involved in the dispute, has settled with some of the municipalities and is in negotiations to resolve the dispute with the others. As part of the settlements, AT&T and Verizon agreed to start collecting the tax from their customers. The municipalities stand to earn $80 million a year from the tax if all carriers agree to collect it. The municipalities aren't likely to get as much as sought in back taxes. Based on the settlements so far, the municipalities stand to get less than $200 million in back taxes.
http://online.wsj.com/article/SB119734053400320371.html?mod=todays_us_ma...
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