This site is part of the Global Exhibitions Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


Judge Sides With Governments in AT&T Tax Dispute

By Kimberly Koerth
January 16, 2014 - News

Missouri's most populous county and more than 250 city governments around the Show-Me State won't have to repay AT&T customers who said the wireless carrier improperly collected Internet access taxes, a federal judge has ruled.

The decision comes after years of legal disputes between the governments, and AT&T and its customers, the Columbia (Mo.) Tribune reported. The class-action lawsuit sought millions of dollars for AT&T surcharges that the plaintiffs said were used to pay an illegal tax.

Wireless carriers didn't collect business-license taxes until 2008, when the operators were required to pay a lump sum for back taxes and begin collecting taxes on receipts from telecommunications services after a settlement between local governments and the wireless providers; however, Internet-access revenue was excluded from the list of taxable services because of a federal law that bars taxes on online access.

But AT&T collected money for the settlement based on all of its revenue, including Internet access, the court said. After its customers sued the company, the carrier reached an agreement with them in 2010 and stopped taxing Internet access.

The local governments refused to give refunds to AT&T, so its customers filed suit to collect the money directly. The judge ruled in the governments' favor, though, saying the local governments simply collected money given to them in error. Furthermore, the plaintiffs simply didn't prove that the governments were responsible for their loss.

The court ruled the payments were not a tax and therefore not an illegal collection of Internet service taxes because AT&T paid the governments as part of a settlement agreement.

comments powered by Disqus
Related News
"Details will not be released," the companies not-so-helpfully noted.
Verizon is among seven of America's largest companies that pay its CEOs more than it pays in
Claire Cleveland
A first of its kind in the industry, this support service will answer those sales tax questions for