A wireless telecommunications affiliate of AT&T has sued the city of Vancouver to recover over $500,000 that the city improperly collected in taxes from the company’s customers between 2005 and 2010.
The city intends to fight the repayment demand, said Brent Boger, a Vancouver assistant city attorney.
The lawsuit filed by New Cingular Wireless is one of many being filed across the state and nation over tax overcharges that the company attributes to its own coding error. Because of the error, cities and states taxed New Cingular customers not only on telephone services, which is allowed, but also on internet access, according to the lawsuit. State and federal law prohibits taxation of internet access, the suit says.
Customers in Washington and 29 other jurisdictions filed suits against AT&T Mobility Services and its affiliates, including New Cingular, to recover payments from the improper tax. The cases were consolidated into a single case in which New Cingular agreed to seek refunds from cities and counties that collected the tax.
Vancouver was asked to repay the tax money in 2010 but has refused to return the funds, the lawsuit says. Boger said the city will raise numerous legal defenses, including whether the lawsuit was filed after expiration of the statute of limitations.
Vancouver isn’t alone in resisting payment. AT&T spokesman Marty Richter said Friday that the telecommunications company is in the process of filing lawsuits against Washington cities that have not responded to the repayment demand or that have refused to pay. Similar actions are taking place throughout the country.
New Cingular filed its lawsuit against the city in Clark County Superior Court on July 18 seeking $521,569.88 in refunds, which would then be returned to customers. The amount of refund each customer will receive hasn’t been determined, Richter said.
“AT&T Mobility does not stand to benefit from this lawsuit in any way,” he said. “Any refunded tax revenue will be passed along to the class — people who are our customers and residents of Washington, and who initially paid the taxes.” He said attorney representing defendants who have sued AT &T are likely to ask the courts to approve payment of their attorneys’ fees from AT&T and from the refunds.
Boger said some jurisdictions who are being asked to return small amounts of money are choosing to pay rather than pay for a costly legal defense. Of Vancouver’s half-million dollar repayment, Boger said: “That’s worth fighting for.”
If the city does have to return money to AT&T for distribution to its past customers, Boger expects that the money would be deducted from future tax payments by AT&T to the city.
Richter said Friday that the settlement covers current and former customers of AT&T Mobility who paid taxes, fees or surcharges to AT&T Mobility on Internet access through iPhone data plans, Blackberry data plans, other smart phone data plans, laptop connect cards and pay-per-use data services from Nov. 1, 2005 ,through Sept. 7, 2010.
Vancouver residents who think they might be eligible for a refund can get more information from AT&T by calling 877-905-8928.
Editor’s note: This story was corrected to say that attorneys representing defendants who have filed against AT&T are likely to ask the court to approve fee payments out of refunds and from AT&T, according to an AT&Tspokesman. The earlier story incorrectly stated that AT&T would likely ask the courts to approve payment of its attorney fees from the refunds.
