NewsDecember 13, 2007
CLAYTON, Mo. -- AT&T Mobility has agreed to pay $76.3 million in local taxes to settle litigation with hundreds of Missouri towns, adding another victory to municipalities fighting to get cell phone carriers to pay the same taxes as land-based phone companies...
The Associated Press

CLAYTON, Mo. -- AT&T Mobility has agreed to pay $76.3 million in local taxes to settle litigation with hundreds of Missouri towns, adding another victory to municipalities fighting to get cell phone carriers to pay the same taxes as land-based phone companies.

The tentative settlement could end six years of litigation between AT&T Mobility, a division of AT&T Inc., and 300 Missouri towns, the St. Louis Post-Dispatch reported Wednesday.

Cell phone company Verizon Wireless agreed earlier this year to pay Missouri towns $24.5 million for two years worth of back taxes, plus $5 million in cities' legal bills.

AT&T filed its settlement documents Friday with St. Louis County Circuit Judge Bernhardt C. Drumm Jr., who approved the deal. But the settlement won't be final until the cities themselves approve it, said Ted Wagnon, a spokesman for AT&T in San Antonio.

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At issue in the litigation is whether cell phone companies should pay the same kind of taxes cities have long levied against tradition landline customers. The Missouri Supreme Court ruled in 1999 that cellular carriers could be taxed, leaving the question of how much the providers owe in back taxes.

Wagnon emphasized that the settlement would not bring an increase in customers' bills. That's because cell phone companies typically collected taxes from subscribers over the last few years, even as they fought in court to end the practice.

AT&T, Verizon and other cell phone providers argued in court that cell phones are really a two-way radio, beyond the reach of the taxes. The companies also contended that cities had no jurisdiction, because cell phones, unlike a conventional telephone line, are used in various locations.

The Missouri Supreme Court rejected both the arguments and later threw out a cap the legislature put on the level of local tax.

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