March 05, 2009

News Release

For Immediate Release

City Settles With AT&T Mobility Over Telecomm Taxes

The City of Springfield and AT&T Mobility have reached an out-of-court settlement to end lawsuits over collection of business license gross receipts tax.

Under the settlement agreement approved in a closed City Council session on Tuesday, March 2, AT&T Mobility will pay the City of Springfield $10.22 million, which includes back taxes owed as well as taxes paid under protest that will be released. AT&T will voluntarily pay the gross receipts tax on wireless service going forward.

Mayor Tom Carlson said he will recommend to City Council that the $10.22 million settlement be applied to the Police/Fire Pension Fund. That amount would equal the amount the City underfunded the pension plan during four years from FY2004 to FY2007, plus interest.

“I am very pleased to reach this settlement with AT&T Mobility and be able to fulfill the pledge we made to citizens before February’s election to make the City’s contribution to the pension fund “whole” again through a telecommunications settlement,” Mayor Tom Carlson said.

The settlement agreement will be added to the March 9, 2009 City Council agenda.

The settlement results from a lawsuit the City filed in U.S. District Court in Jefferson City in May 2004, naming SBC, Sprint, Alltel, Cingular (now AT&T Mobility) and Nextel as defendants. The City reached a settlement agreement with Sprint Nextel in September 2007 for $2.375 million, of which the City netted $1.54 million from the settlement. Litigation continues with AT&T (landline company that was formerly SBC) and Alltel.

For more information, contact: Assistant City Attorney Nancy Yendes, (417) 864-1645.

city of springfield

Department of Public Information

840 Boonville Avenue • P.O. Box 8368 • Springfield, MO 65801
417-864-1010 • Fax: 417-864-1114 • springfieldmo.gov