Sprint Let off the Hook for Sales Tax Policy

The SEC ended its formal investigation into Sprint Corp.’s sales tax practices without taking action. This decision comes as the New York Attorney General continues to move forward with a case that Sprint failed to collect and pay sales taxes. Sprint says that the SEC opened an investigation in July 2012 and let the company know last month that it has closed the investigation and had no intentions for further action.

New York Attorney General Eric Schneiderman sued Sprint in April 2012 for $300 million claiming the carrier failed to pay sales taxes over the past seven years. The issue is what proportion of a flat-rate calling plan can be taxed by the state. Sprint believes that New York can only tax calls that start and end in the state while Mr. Schneiderman argues that state law requires cellphone companies to collect and pay sales tax on the full amount of their monthly charges. Sprint said in the filing that it believes this charge is without merit.