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Sprint / charging sales tax on early termination fee

1 New York City, NY, United States Review updated:

Get this! SPRINT has the nerve to charge sales and excise taxes on an early termination fee (ETF). SPRINT knows that imposing the penalty of an ETF is not a sale of a product or service, yet it tries to tack on a host of state and local sales and excise taxes onto the penalty.

This is an abuse of SPRINT's obligation to collect sales and excise taxes when SPRINT knows that terminating an account is not in any way shape or form the sale of product or servce.

If SPRINT tries this on you, don't pay the entire bill until it agrees to remove the sales and excise taxes purportedly attributed to the ETF. Of course, sales and excise taxes would apply to an unpaid service amount, but when the service amount is combined on the same bill with the ETF, you might not be able to tell how much more SPRINT is charging you above and beyond the taxes applicable to the service amount.

This came to light in my case when I had already paid for the last month of service. So when the ETF was billed, it stood alone on the invoice and it had several state and local sales and excise taxes added on to the ETF.

When I strenuously objected that I wouldn't pay taxes on an ETF and that I wanted to see in writing where an ETF can be the basis for sales and excise taxes, and that I would fight them on this and would withhold payment of the ETF until I received such documentary proof, SPRINT responded (after the phone attendant put me on hold for several minutes while he discussed this with his supervisor) that SPRINT would waive the taxes if I just paid the ETF.

So this was a sprint that SPRINT lost, but only because SPRINT's usual trick of burying the sales and excise taxes in a final bill showing final service charges AND the ETF was laid bare when I paid my last service charge and SPRINT "made the mistake" of not also including the ETF to camouflage the additional unwarranted charges.

[I understand that fixed ETFs are illegal in California.]

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  • Sp
      16th of Jul, 2009
    0 Votes

    Get over it, Sprint didnt charge you taxes, your state did. Sprint does not have tax authority, having worked for sprint off and on for 3 years I can honestly say, they never imposed taxes on anyone.

  • Lr
      6th of Nov, 2009
    0 Votes

    He is right they are not allowed to charge these taxes . According to the department of revenue law 67-6-102 section ( 82 ) A - sales and tax use- it has to be a product or service sold to impose a sales tax. I am fighting this same battle with verizon and I have reviewed the law and they have been collecting a tax that is not permitted by law. I plan on taking this to court and having verizon or the state repaying all the taxes collected on these fees. Not sure who is at fault but will hope to find out soon.

    So if the law states it has to be a product or service sold, who do you think imposed a sales tax on the early termination fee ?

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