Verizon Wireless Accused Of Wrongly Billing NY Customers State Tax

A class action lawsuit has been filed against Verizon Wireless accusing it of passing directly to customers a “metropolitan commuter transportation district” tax that the company was actually supposed to pay. Albert Levy, who filed the lawsuit, points out that Sprint has never charged the tax to customers. Verizon Wireless calls the accusation “silly,” and says they’re billing it correctly. Perhaps not surprisingly, the actual wording of the tax law leaves the matter up in the air.

“Class action claims Verizon Wireless misrepresenting tax on New York bills” [RCR Wireless]


Edit Your Comment

  1. I_am_Awesome says:

    the actual wording of the tax law leaves the matter up in the air.

    Well then… not much to discuss here.

  2. Bizdady says:

    Hope verizon changes their terms soon so I can get out of my contract without ETF.

  3. Corporate-Shill says:

    Tax paid to the State? Most likely yes. Therefore Verizon will need to get the money back from the State. Good luck getting the $ back from the State these days.

    • strathmeyer says:

      @Corporate-Shill: It’s not that the tax shouldn’t be paid, people are claiming it’s illegal for Verizon to directly charge people for the tax instead of paying it out of Verizon’s own pockets.

  4. Dr. Eirik says:

    Wait, who do you think pays for taxes that companies are charged? It’s the consumers. If they don’t pass it down as a line item, then it’s just going to be included in the next fee increase.

    It’s not like they have a different source for money they have to pay to the state/feds.

    • HunterZ says:

      @Dr. Eirik: I guess it was expected that the fee would be spread amongst all Verizon customers everywhere instead of just New Yorkers, and New Yorkers are pissed that Verizon is only passing the costs onto them specifically. As a non-NY resident, I’ll side with Verizon :p

    • InThrees says:

      @Dr. Eirik: Yeah, this lawsuit seems liked the hatched plot of someone who isn’t all there.

      Verizon apparently has more line items on their bill than Sprint does. Verizon probably lists a smaller ‘plan’ or ‘service tier’ charge, which translates into “glob of cash we use to pay our bills and reap profit from.”

    • S-the-K says:

      @Dr. Eirik: I concur. Corporations don’t pay taxes. Taxes are a business expense passed on to consumers.

      I agree that NY taxes should be charged to NY customers. Why should customers in other states subsidize NY customers’ tax burden. If NY customers don’t want to pay unnecessary taxes, stop voting for tax-happy politicians, and tell your current politicians to cut spending and not raise taxes.

  5. CoarseLive says:

    Verizon just slammed me with HBO. I was called and offered free HBO. I told them I didn’t want free HBO, because they would want to leave it active on my system and require me to cancel it in order to not get charged.

    Evidently, they gave it to me anyway. Today, I received their $30 charge for something I not only didn’t want, but flat out told them not to give me.

    Tomorrow, I’m filing a complaint with the NY State Attorney.

  6. nybiker says:

    Just in case anyone was wondering what it looks like, here’s a list of my line items (it’s a 2-line family plan).

    Current Calling Plan 01/26 – 02/25 $60.00

    Usage Charges

    Voice $0.00

    Data $0.20

    Verizon Wireless’ Surcharges

    Fed Universal Service Charge $1.20

    Regulatory Charge $0.07

    Administrative Charge $0.85

    Gross Receipts Surchg $3.51

    Taxes, Governmental Surcharges and Fees

    NY State E911 Fee $1.20

    NY City 911 Surchg $0.30

    NY State Sales Tax $2.63

    New York City Sales Tax $2.63

    NY Local McTd Sales Tax $0.25

    Total Current Charges for line 1 – $72.84

    Monthly Access Charges

    Current Calling Plan Add’l Line 01/26 – 02/25 $9.99

    Usage Charges

    Voice $0.00

    Verizon Wireless’ Surcharges

    Fed Universal Service Charge $0.21

    Regulatory Charge $0.07

    Administrative Charge $0.85

    Gross Receipts Surchg $0.63

    Taxes, Governmental Surcharges and Fees

    NY State E911 Fee $1.20

    NY City 911 Surchg $0.30

    NY State Sales Tax $0.47

    New York City Sales Tax $0.47

    NY Local McTd Sales Tax $0.04

    Total Current Charges for Line 2 – $14.23

    So, what should be a $69.99 bill, gets jacked up to $87.07. Yeah, it’s not all VZW’s fault (remember, companies don’t “charge” sales tax, they only “collect” it on behalf of the government), but still, from a consumer point of view, it still sucks.

    Oh, there’s the matter of the 20-cent shafting for a text message. That really burns me up. I’m still trying to figure out how that got through even though I use a Verizon alias so I supposedly don’t get text messages. Maybe because it was a VZW customer that sent it to me that allowed it to sneak through without using the alias? Well, that’s a question for another post.

    BTW, the McTd Sales Tax is not a Micky D’s sales tax. It’s for transportation stuff is the short answer.

  7. Verucalise (Est.February2008) says:

    I wish we had another cell provider in the upstate NY area that has the coverage of Verizon- we’d leave them in a heartbeat. We like to send texts to eachother, maybe at the most 50 a month. Unfortunately, 1/2 are picture texts and Verizon gives you the shaft on them, I think .35 per pic text. So we have to pay a bullshit $5 per LINE to get 250 messages a month- $10 a month!

    It would be so much better if they gave tiered pricing on texts- I’d gladly pay $2.50 a month for 100 texts on each line. I hate paying for shit we don’t use.

    • Anonymous says:

      @verucalise: Have you tried calling VZW and talking to them about your problem? Because they DO have tiered pricing plans, and those plans count picture and video messages as normal text messages.

  8. rolla says:

    Taxes added when living in NYC is expensive. A friends pays at $11-12 in taxes while I only pay $5 in taxes with my NJ number…gotta love NJ!

  9. Pandrogas says:

    If Verizon has to pass the tax on to the consumer for the tax to be paid, so be it. The reason I’m not against it passing the tax on is because maybe it’ll rile people up enough in NY to actually do something about the rampant over-taxing in the state.

    Why are they blaming Verizon for bad business practices when the government is the one that forced it? And seriously, what is this “metropolitan commuter transportation district” tax anyways and how does it apply to wireless communications?

  10. oneandone says:

    There’s a bit of logic in the law not wanting the customer to be taxed directly for actions they had no control over. A lot of taxes & regulatory fees are to provide disincentive for certain actions. If the taxes & fees can just be passed along to customers, you lose a lot of the disincentive.

    I’m not experienced with telecom regulations, but I wouldn’t be surprised if there were things like a tax per # of towers / transmitters the company owns in a state. This would provide an incentive to use your towers more efficiently, or invest upfront in something with more capacity so it could be used on its own for a long time, instead of needed to be supplemented with additional towers as # of customers (or amount of data transmitted) increased.

    So if you can just pass along the tax to your customers, you get the benefit of advertising your “Great $50 family calling plan!!!” while customers are forced to do some significant work to figure out what the plan would cost if it included all fees, and how that compares to competitors. As long as the company can keep charging customers $50+taxes+fees, there’s no incentive for that company to do things that would reduce taxes+fees.

    BUT if I’m required to disclose that as “$86 monthly plan, including taxes and fees” and my competitor has the same price plan but has taken certain actions to reduce their taxes (building fewer towers, participated in some hypothetical program to provide free phone service to needy people), they get to advertise “$67 monthly plan, including taxes and fees” then the incentive structure has worked, because the company that took action gets rewarded with more customers.

    It boils down to this: allowing the company to pass the taxes & fees directly on to the customer without disclosing that cost upfront & very clearly to the customer is taxing the customer for the company’s behavior. That’s not fair.