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Sunday, May 1, 2016

AT&T settlement is passed on to customers

Wednesday, March 10, 2010

Downtown Monett at dusk. [Times Photo by Murray Bishoff]
Both wireless and landline customers of AT&T have received bills in the past month that include a charge for the settlement of litigation last year over unpaid franchise taxes.

Monett City Administrator Dennis Pyle confirmed that Monett is among the 270 cities that sued AT&T where the phone company has opted to pass the settlement along to customers. Bills from the various phone companies now have a "municipal gross receipts charge" covering the future cost of paying the franchise tax to cities.

Monett received $126,521.23 in its settlement for unpaid landline fees from AT&T and $147,164.56 in unpaid cell phone taxes from AT&T Mobility.

"Our situation and the city of Springfield's are identical," Pyle said. "We cannot prevent the phone company from passing the settlement along to its customers."

The city's reason for pursing payment remains fundamentally sound, Pyle said.

"The cell phone companies refused to pay their taxes. How is that any different from you and I not paying our taxes?" Pyle said.

"AT&T was not charging tax on the gross receipts it should have been charging on. The tax language has not changed," Pyle continued. "With the settlement, AT&T is finally paying tax on everything it is required to pay."

The settlement was based on Monett's 1951 ordinance requiring phone companies to pay a monthly 5 percent franchise fee for "all telephone and telephonic services." Cell phone companies stopped payments around five years ago, claiming that cell phones were not telephones. Cities jointly sued the phone companies, leading to settlements last year.

"Out of all the settlements Monett has had with Alltel, Verizon, Sprint, U.S. Cellular and AT&T," Pyle said, "AT&T is the only one that has ever passed the settlement amount for back taxes through to its customers. AT&T did it on the wireless side with AT&T Mobility and on the landline side."

While cities cannot appeal the rate increase by AT&T, Pyle said individual customers apparently have no such restrictions. According to reports in the Kansas City media, Minsky's Pizza has filed a lawsuit challenging the legitimacy of the fees.

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