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Los Angeles sues AT&T for unpaid taxes [Updated]

July 25, 2011 |  9:02 pm

City hall
Anyone who’s ever taken a close look at a cellular telephone bill knows there’s a lot of fees and taxes buried in the fine print.

But it’s nothing like the bill that city of Los Angeles has slapped on AT&T.

The city sued AT&T Mobility in Los Angeles Superior Court on Monday, seeking $4.9 million in unpaid “communications user tax,” plus penalties and interest.

The lawsuit, filed by Los Angeles City Attorney Carmen A. Trutanich said the taxes date back to 2005. AT&T Mobility, a subsidiary of AT&T Inc., appealed the taxes in 2008 and was ordered by the city’s Board of Review to pay up, the city said. Since that time, the company has “failed to pay the amount due and owing,” the lawsuit said.

[Updated: AT&T spokesman Marty Richter said in an e-mail statement that federal law prohibits the city from charging the tax, which he said was related to wireless telephone service.

 "AT&T Mobility doesn't think our customers owe taxes under a city ordinance based on a federal law that both the federal courts and the IRS have ruled does not apply to wireless services," Richter said. "We appealed these assessments in 2008 and have been engaged with the city for more than a year in discussions on this matter.  We look forward to getting it resolved."]


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Photo: L.A. City Hall. Credit: Irfan Khan / Los Angeles Times