City, AT&T reach tax settlement

The city of Springfield announced today that it has reached an out-of-court settlement with AT&T Mobility, formerly Cingular Wireless, in a lawsuit over business license gross receipts taxes.

Springfield City Council approved the settlement agreement during a closed session after its March 3 luncheon. The city will receive $10.22 million from AT&T Mobility, including back taxes owed and the release of taxes paid under protest. The wireless provider also has agreed to voluntarily pay the gross receipts tax in the future.

The settlement stems from a lawsuit filed in U.S. District Court in 2004 against SBC, Sprint, Alltel, Cingular and Nextel.

Mayor Tom Carlson plans to recommend that the settlement money be applied to the Police and Fire Pension Fund, making up for the amount the city underfunded the pension plan between fiscal 2004 and fiscal 2007, plus interest. Council will likely add the settlement agreement to the agenda for its March 9 meeting.

"I am very pleased to ... 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," Carlson said in a news release.

The city settled with Sprint Nextel in September 2007, netting $1.54 million. Litigation continues with AT&T - the landline company that was formerly SBC - and Alltel.[[In-content Ad]]