Comptroller Susan Combs is asking Sprint to get rid of the line on its bill seeking customer "reimbursement" for the state's new margins tax.
The company doesn't intend to honor her request.
Combs says her office never signed off on the charge (it's not clear they have the power to do that anyway). And she's not happy that the rate charged on some customers' bills is higher than the highest rate for the new tax. The tax can't go higher than 0.7 percent of any company's gross receipts; on bills sent to Sprint and Nextel wireless customers, the company has set the reimbursement at 1 percent (it's at 0.6 percent on the bills sent to the company's wire-line customers).
A spokesman says the company will end up under-collecting the amount needed to cover the tax, and welcomed a review of the company's tax return when it's filed in 16 months.
This is the first public faceoff over how the state's new business tax will actually be administered. Companies will owe the tax based on business done in their 2007 fiscal years, but it's not actually due until May 2008. They and the state's tax collector are feeling their way through a new minefield.
Combs also isn't happy that the company is seeking "reimbursement" for taxes it won't pay for more than a year.
The new comptroller wants the company to take the charge off its bills until the Legislature has a chance to take a look. If they won't do that, she's threatening "audit and collection action by this office and a possible injunction by the attorney general."
A company spokesman, John Taylor, said the company is reviewing the letter from Combs, that they'll continue to collect the surcharge, and that the comptroller doesn't have the power to regulate what the company puts on its bills. Sprint, he said, wants to be "open, honest and up front with everyone involved," and explained the charge to customers on their bills, on the company's website, and with live operators if people call in and ask about the fees. He said the Legislature already addressed the tax issue and didn't do anything to prevent what the phone company is doing. He ended with a line that'll probably appear, in some form, in the company's official response: "We are absolutely in compliance with state and federal law."
