S SentinelOne Inc

By Sarah Krouse 

Sprint Corp. will pay $330 million as part of a settlement with the New York state attorney general for failing to collect adequate state and local taxes on some of its wireless calling plans.

The settlement is the largest ever garnered by a single state under a false claims act, Attorney General Barbara Underwood's office said Friday. Sprint "knowingly failed to collect and remit" more than $100 million in state and local taxes for nearly a decade on some of its wireless plans, state officials said.

"While we disagree with the State's characterizations, we believe resolving this matter is in the best interest of the company," a Sprint spokeswoman said in an emailed statement. She said the settlement wouldn't have a material impact on the company's financial performance.

False claims act laws allow individuals or companies who know about fraud against the government to bring cases on behalf of the state or U.S. and get a share of whatever money is collected as a result of their claims

The investigation by the state attorney general and New York Tax Department was spurred by a whistleblower lawsuit filed in March 2011. The whistleblower will receive $62.7 million. Local governments that missed out on tax revenue as a result of Sprint's actions get a portion of the settlement.

The case centered on a slice of taxes the state says Sprint failed to collect and pay for flat-rate calling plans between 2005 and May 2014. Under such plans, customers paid a set fee per month for a given number of minutes of calling.

Under New York state tax, the total cost of those plans was subject to sales taxes regardless of whether customer calls were made within New York, between states or internationally. New York officials said Sprint didn't collect and pay state and local sales tax for part of those plans that Sprint "arbitrarily deemed" to be for interstate calls.

By not charging the full tax amount, the carrier was able to offer more competitive pricing than its rivals and attract more customers, the state alleged.

Sprint, which has 54.5 million customers, is awaiting antitrust approval for a merger with rival T-Mobile US Inc. The roughly $26 billion deal recently cleared a national security panel, and the companies expect to complete the combination in the first half of 2019.

Write to Sarah Krouse at sarah.krouse@wsj.com

(END) Dow Jones Newswires

December 21, 2018 12:58 ET (17:58 GMT)

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