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AT&T has to track down $1 billion in data tax case

Company admits no wrongdoing, but under settlement approved last week has to work with state and local governments to repay taxes allegedly levied improperly against customers for mobile Net access fees.

Eric Mack Contributing Editor
Contributing editor Eric Mack covers space, science, climate change and all things futuristic. His encrypted email for tips is ericcmack@protonmail.com.
Eric Mack
2 min read

AT&T may need to knock on a few doors and place a few calls to get back nearly a billion dollars it payed to states and other governments on behalf of its wireless customers. That's one of the requirements of a class-action settlement approved last week over taxes the company is alleged to have levied improperly for wireless data.

Lawyers from Bartimus, Frickleton, Robertson & Gorny filed suits in every state claiming that AT&T was in violation of the Internet Tax Freedom Act, which placed a moratorium on taxes for Internet access until November 1, 2014. The cases were later consolidated into one to be overseen by a federal court in Illinois. According to an online brief from the Kansas City firm, it "may be the largest class action case in history in terms of the number of consumers affected...from over 2,000 taxing jurisdictions nationwide."

The settlement lays out a detailed process for how AT&T will work to get the taxes back--plus interest, where legal--for its customers on their behalf.

The actual settlement is for more than $1 billion dollars, although due to some statutes of limitations, the amount will come in at just under a billion, according to estimates included in the district judge's order approving the settlement .

"As part of the settlement, AT&T Mobility stopped charging certain taxes and fees on data plans," Marty Richter, an AT&T spokesman, told the Dallas Business Journal in an e-mail. An AT&T spokesman could not immediately respond to CNET's request for comment.

In the settlement (PDF via FierceMarkets.com), the district court acknowledges the plaintiff's complaint that the taxes shouldn't have been collected. But is also acknowledges that AT&T says the charges are incorrect and denies all liability, but is agreeing to recoup the funds paid to governments on behalf of customers at its own expense anyway.

"AT&T Mobility collected only those taxes that we believed we were required to collect, and passed them along to state and local taxing authorities," Richter also told the Dallas Business Journal. "We agreed to settle these cases to avoid the burden and cost of further litigation."

To find out if you should be expecting some benefits to be coming your way, check out the settlement site, although note that it hasn't been updated since the settlement was approved.