New York accuses Sprint of ducking taxes

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The lawsuit claims the decision to not collect taxes was part of a scheme to give Sprint an edge over its competitors. The suit also accuses Sprint of submitting false records to state officials to conceal the fraud. 

In a statement, Sprint "categorically" denied the allegations and said the lawsuit is "without merit."  

"We have collected and paid over to New York every penny of sales taxes on mobile wireless services that we believe our customers owe under New York state law," Sprint said. "With this lawsuit, the Attorney General's office is claiming New York consumers, who already pay some of the highest wireless taxes in the country, should pay even more. We intend to stand up for New York consumers' rights and fight this suit."

The lawsuit is the first tax enforcement action brought under the state's False Claims Act. If Sprint is found liable, the company could have to pay triple the damages as well as other penalties and attorneys' fees.