Aug 2 (Reuters) - The U.S. Securities and Exchange
Commission has opened a formal investigation into Sprint Nextel
Corp's sales tax collection following a $300 million New York
court case against Sprint, the No. 3 U.S. mobile provider.
Sprint said on Thursday in its quarterly filing with the SEC
that the regulator had issued the order for an investigation on
July 23, three days before the company' quarterly earnings
Sprint said it is cooperating with the SEC and does not
expect these matters to hurt its financial position or the
results of its operations.
The company, which said that the New York case is without
merit, said in the filing that it could not predict the outcome
or the timeframe for the conclusion of the SEC investigation.
New York State said in April that it was suing Sprint for
more than $300 million and accused it of committing tax fraud by
deliberately not collecting or paying millions of dollars of
taxes for its cellphone services.
Sprint said in a separate statement that it had recently
received a subpoena from the SEC in connection with its probe
into its collection of a remittance of state and local taxes,
including New York.
The company said that it believes its practices around state
and local taxes on mobile wireless services are "in compliance
with applicable law."
On June 14, Sprint filed to have the New York Attorney
General's case dismissed. It said on Thursday that it "intends
to continue defending the matter vigorously."
Sprint shares closed down 3 cents or less than 1 percent at
$4.29 on the New York Stock Exchange on Thursday.
(Reporting By Sinead Carew and Jonathan Stempel)
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