Lawsuits are being filed around the U.S. in which allegations are being made that AT&T has been illegally taxing consumers for Internet access. Lawsuits have been filed in the states of Georgia, Indiana and Alabama charging the telephone company giant with collecting illegal sales tax on its data plans. The allegations state that the collection of Internet taxes is in violation of the Federal Tax Freedom Act which prohibits the collection of any sales tax until the year 2014.
In a recent news article it also states:
In some states, the claim is merely that the “taxes” are not actually “taxes” at all, just ways to collect more revenue. But in some states, like Alabama, the suit points out that companies which collect sales tax are allowed to hold back tiny percentages from the state in order to cover the cost of compliance (in Alabama, it’s 0.25 percent of the tax).
The GAO report does suggest that basic Internet connections, including those provided by DSL, cable, and wireless technologies, cannot be taxed; the lawsuits argue that such taxes are in fact being levied by AT&T. The company hasn’t been commenting on the suits, and AT&T has not yet filed a response in any of the cases we examined. It’s quite possible that the company will claim its data plans are not pure “Internet access” under the law, despite being broken out separately on the bill, but we’ll have to see.
How much money is at stake here is hard to say. The lawsuits do say that they expect the issue to exceed the $5 million threshold for class action cases.
What is very interesting is that I use the AT&T Go Phone plan. I renewed my plan on December 2, 2009 and paid $100 for an additional one year of service. I was also charged a sales tax fee when I made the purchase. I would suspect that the fee I was charged if in fact it was a sales tax should then be reimbursed to me.
If you are a AT&T user what has your experience been? Let us know if you have been illegally charged a sales tax the by AT&T.