AT&T sues several Washington cities

by: Graham Johnson Updated:


An affiliate of AT&T Mobility is suing several Washington cities, saying they're holding money that belongs to wireless customers.

Almost everyone has a cellphone but few pay attention to all those lines on the bill, especially for fees and taxes. Customers can be charged municipal taxes on phone service, but not on Internet service, commonly known as data plans. But from 2005-2010, because of a coding error, AT&T Mobility illegally collected Internet taxes from wireless customers.

Faced with a class-action lawsuit, the company settled. As part of that agreement, AT&T is trying to pay customers back. But AT&T gave the tax money to cities. An affiliate of AT&T Mobility, New Cingular Wireless, sued a long list of Washington cities last year, demanding refunds. The company says the City of Kent received nearly $500,000 in illegally collected tax money.

City officials say AT&T has not provided enough detail about which customers were overcharged, by how much, and whether those people lived in Kent, so the city decided not to pay. One lawsuit against Kent has been dismissed. AT&T has now filed a new one. The company is suing several local cities. It claims numerous cities have provided refunds, but won't provide a list.

The Seattle City Attorney's Office said the company has asked Seattle to return $5 million. The city is reviewing that request.