For Immediate Release
AT&T Missouri, City Settle Out-of-court
The City of Springfield and Southwestern Bell Telephone Company (now known as “AT&T Missouri”) have reached an out-of-court settlement to end a lawsuit regarding the City’s business license gross-receipts tax.
Under the settlement agreement signed today, AT&T Missouri will pay the City of Springfield $7.45 million for back taxes. AT&T Missouri will pay attorneys’ fees associated with the settlement directly to the City’s outside legal counsel.
AT&T Missouri has been paying gross-receipts tax on its landline operations, but now also will voluntarily pay additional taxes to reflect that the scope of the taxable base is greater than the base on which they have been paying.
The City Council authorized the City Manager to pursue the final points of negotiation to end the litigation during a closed meeting on Dec. 23, 2009. At that meeting, the Council also expressed its intentions to apply the settlement money directly to the Police-Fire Pension Fund in keeping with its resolution prior to the Nov. 3, 2009 election. The Council will consider a formal action to direct the settlement to the Pension Fund at its Jan. 26, 2010 meeting.
“I am confident the City Council will fulfill its pledge to voters to put these proceeds into the fund,” Mayor Jim O’Neal said. “I am very pleased to reach this settlement with AT&T Missouri and successfully conclude the last of these lawsuits over the back taxes owed to the City.”
The settlement results from a lawsuit the City filed in the U.S. District Court in Jefferson City in May 2004, naming AT&T, Sprint, Alltel, Cingular (now AT&T Mobility) and Nextel as defendants. The U.S. District Court ruled in the City’s favor in July 2007 on issues involving wireless services, leaving only the landline issues to be resolved.
With this settlement, the City of Springfield has netted a total of $25,128,788 from the telecommunications providers; of that amount, $24,088,788 has been or will be applied to the Police-Fire Pension Fund, including the entire amounts of the last three settlements.
The telecommunications companies paid a total of $218 million to settle a class-action lawsuit with 240 other Missouri communities. If Springfield would have participated in that action, the City would have received about $5.5 million.
For more information, contact: Assistant City Attorney Nancy Yendes, (417) 864-1645.
Download a copy of the settlement. (308k pdf)