AT&T to Pay $65M to Settle Phone Tax Claims

     ST. LOUIS (CN) – AT&T has agreed to pay $65 million to more than 300 Missouri cities and St. Louis County to settle a class action over telephone taxes. The cities sued in 2004, claiming AT&T was underpaying telephone business taxes by excluding certain items.

     AT&T argued that it shouldn’t have to pay on those excluded items, because tax ordinances did not cover them.
     St. Louis Circuit Judge Edward Sweeney gave preliminary approval to the settlement with the cities, and a final hearing is scheduled for Nov. 2.
     St. Louis County reached a separate agreement with the same terms, and that agreement is final. St. Louis County is the only county involved, because it is the only county in Missouri with the authority to impose a telephone gross receipts tax. Of the $65 million, St. Louis County will get $4.6 million, Kansas City will receive $10.7 million and attorneys will take in $16.25 million.

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