Appeal of cities' cell suit denied

The lawsuit was originally filed in U.S. District Court in May 2004 against a number of cell phone providers who disputed the city’s gross receipts tax on telephone services; in Springfield, the tax is 6 percent of gross receipts.

The court ruled in July 2007 that a cell phone is a telephone, making the companies subject to the tax, according to a city of Springfield news release.

An appeal of that decision was denied July 3 by the U.S. Court of Appeals for the Eighth Circuit.

The defendants could file a motion for rehearing in front of the court en banc or appeal to the U.S. Supreme Court. When the appeal process is exhausted, the parties would meet in an administrative hearing to determine the amount to be paid, according to the release.

The exact amounts in dispute are shielded by the judicial discovery process until released by the court, according to the release, because they represent proprietary information on the companies’ sales in Springfield.

In September, the city reached a settlement with Sprint Nextel Corp. in which the company paid the city nearly $2.4 million in back taxes; the city received $1.5 million after court costs and attorney fees.

Springfield collects about $3.5 million a year in gross receipts tax revenue, which goes into the city’s general fund.

This story originally appeared in SBJ’s July 7 free e-news Daily Update. Click here to register.