January 31, 2011
The Honorable Julie Magee
The Honorable Luther Strange
501 Washington Avenue
Montgomery, AL 36130
Request for ADOR and AAG to make appearance in class action lawsuit
Dear Ms. Magee and Mr. Strange,
As a cellphone customer of AT&T Mobility, I received a class action notice about a lawsuit against AT&T Mobility that is pending in federal court in Illinois and that affects the State of Alabama. (You can find more information about the lawsuit on the Internet at http://attmsettlement.com/ .)
The class action notice says AT&T Mobility included in customer charges certain taxes that AT&T paid over to state and local taxing jurisdictions and these taxes were allegedly not permitted under the federal Internet Tax Freedom Act. The notice says AT&T denies that it did anything wrong.
The State of Alabama is one of the taxing jurisdictions that collected the taxes.
It seems to me that all the taxing jurisdictions that collected the taxes have a significant interest in this litigation and should be notified and be allowed to appear in the litigation.
As a customer receiving the class action notice, I have filed an objection in the lawsuit. In my objection, I said the foregoing, to wit, that the taxing jurisdictions should be notified of the litigation and be allowed to appear. I further said I would would contact the Alabama Department of Revenue and the Alabama Attorney General requesting that they make an appearance in the litigation. You can read the entirety of the objection I filed on the internet here: http://robertshattuck.blogspot.com/2011/01/objections-in-at-class-action.html
It seems to me that, as soon as there was a question about the legality of the taxes in question, the taxing jurisdictions and/or AT&T should have filed a declaratory judgment action for a determination of whether the taxes were permitted under the Internet Tax Freedom Act. For this purpose, the parties could have paid some law professors to do legal research and file briefs on the question, and the Court ideally would then make a prompt determination of the legality of the taxes, and, if held legal, the taxing jurisdictions could proceed with their collection.
Instead, it appears that the taxes have been included in customer charges and paid over to hundreds of state and local taxing jurisdictions for at least five years. These taxes were presumably counted on in governernmental budgets and have presumably now been spent. Now, five years later, all of this is in the process of being revisited at signficant cost and expense to AT&T Mobility and its customers, as well as to hundreds of taxing jurisdictions and all their taxpayers.
I have no idea what the total amount of taxes in question is or how much cost and expense all this is going to entail. It seems nonsensical that I, as a customer, should be notified to say whether I object or not to the proposed settlement agreement, and not notify and allow the taxing jurisdictions to appear and say whether they object or not, including about all the cost and expense that will be borne by the respective taxing jurisdictions and their taxpayers, and to have an opportunity to suggest alternative ways to the proposed agreement in order to resolve the matter.
Accordingly I hope either the Department of Revenue or the Attorney General, or both, will make an appearance in the case and express their views on behalf of Alabama taxpayers. Maybe you will even contact Revenue Departments and Attorney Generals in other states and inform them of this matter and suggest they make appearances in the litigation as well.
Since the Internet Tax Freedom Act is a federal law, I will probably contact Senators Shelby and Sessions and Representative Bachus and urge that Congress consider ways that the laws Congress enact can be accompanied by procedures and rules that will allow for better and more economical ways for getting certainty about the law and for getting disagreements about the law resolved.
I am both mailing this letter to you by US mail and using your offices, electronic messaging systems to direct you to this webpage where I have posted this letter: http://robertshattuck.blogspot.com/2011/01/request-to-al-dor-and-ag-re-at-mobility.html
Thank you for your attention.
cc. The Honorable Robert Bentley