AT&T customers in Maryland who connect to the Internet with smart phones are being taxed illegally, a class action lawsuit filed Friday alleges. The lawsuit, filed in U.S. District Court by a Baltimore law firm led by trial lawyer William H. Murphy Jr., says those Maryland customers have been improperly billed a 6 percent monthly state tax and a monthly local communications tax. The lawsuit is seeking refunds and contends that total damages could exceed tens of millions of dollars. The Federal Internet Tax Freedom Act, which took effect in November 2003, bans state and local governments from imposing taxes on those who use their phones to surf the Web, according to the lawsuit.

- Lorraine Mirabella