Now here is a real head scratcher. I received a text message from AT&T about a class action lawsuit proposed settlement that may effect me. I immediately got curious and did some digging. The text message pointed to the website www.attmsettlement.com/. At first I thought it might be a scam but after spotting confirmation on CIO.com I am assuming it is valid for now. According to that website this is what is going on:
This is a case that relates to AT&T Mobility’s practice of charging customers for taxes, fees and surcharges on internet access through certain services. These services include iPhone data plans, Blackberry data plans, other smart phone data plans, laptop connect cards and pay-per-use data services. The lawsuit alleges that these practices are not permitted under the Internet Tax Freedom Act, 47 U.S.C. § 151 (1998) (as amended) and other state laws. AT&T Mobility denies that it did anything wrong, denies that it violated any laws, and has raised a number of defenses to the claims.
The settlement includes any AT&T customer who paid taxes, fees, or surcharges on internet access through certain internet services including Blackberry data plans both BIS and BES on bills issued from November 1, 2005 up to and including September 7, 2010. Currently they are waiting for the court to decide if the settlement is fair which will be decided on March 10th, 2011. I am kind of loving how AT&T denies doing anything wrong though is willing to settle. I had no idea that it was against the law to collect tax on internet services since that makes up almost half of my wireless bill on AT&T.
I will leave you guys off with the proposed benefits from the settlement. The second one really made my head spin. Let us know if you learn more about the case in the comments!
First, AT&T Mobility will stop collecting the taxes it has been collecting and paying to states, counties and cities. AT&T Mobility will not collect the tax again unless the applicable laws of the United States or a state change or such laws are interpreted to require or permit AT&T Mobility to begin collecting the taxes again.
Second, AT&T Mobility, at its sole expense, will prepare and process tax refund claims for filing with the various taxing authorities (e.g., state or county or municipal taxing agencies) seeking a refund of the Internet Taxes collected by AT&T Mobility from the Settlement Class and paid by AT&T Mobility to the taxing jurisdictions. AT&T Mobility and/or the Class Representatives will file the refund claims. The refund claims will be based on the amount of taxes each account holder paid to AT&T Mobility. As part of the Settlement, AT&T Mobility has assigned its rights, title and interest in such refunds to the Settlement Class to settle the claims made by the Class. Significantly, AT&T Mobility has agreed to pay the money owed up front, even if a taxing jurisdiction issues future tax credits to AT&T Mobility in lieu of a refund of monies sought on a refund claim for Internet Taxes. Thus, AT&T Mobility has agreed to pay the credited amount to the escrow accounts established pursuant to the Settlement. If the use of the future tax credit will be spread over a three (3) year period or less, AT&T Mobility shall pay monies to the escrow accounts equal to the total future tax credits. If the use of the future tax credit will be spread over a period longer than three (3) years, AT&T Mobility shall pay monies to the escrow accounts based upon a payment formula. Under this formula, the payments are equal to the net present value of such future tax credits of the fourth and succeeding years using a 5% discount rate to compute the net present value. The amount of the first three (3) years shall be paid with no discount.
Third, AT&T Mobility has agreed to pay to the Settlement Class any vendor’s compensation. Vendor’s compensation is the amount of money AT&T Mobility was allowed to retain from the sales tax it collected as compensation for collecting the taxes for some (but not all) taxing jurisdictions. Vendor’s compensation paid under the Settlement does not include amounts to which AT&T would have been entitled independent of the collection of Internet Taxes based on limitations on the amount of credit allowed pursuant to applicable law. All refunds or payments by AT&T Mobility related to credits and payments of the vendor’s compensation will fund separate escrow accounts for the benefit of the Settlement Class.