FOR IMMEDIATE RELEASE 
May 30, 2006
Contact:  Laura Abshire 
(202) 225-0753
 
Ross Responds to Treasury Ending Long-Distance

Telephone Excise Tax

 

 
(Washington, D.C.) Rep. Mike Ross (AR-04) today responded to the U.S. Treasury Department repealing the long-distance excise tax.  The collection of the three percent excise tax on long-distance services will end on July 31, 2006.  The Department of Treasury has agreed to refund taxpayers on long-distance service for the past three years and the Department of Justice has decided to end litigation.  Taxpayers will be able to apply for refunds on their 2006 tax forms, to be filed in 2007.

 

The Telephone Excise Tax Repeal Act of 2005 amends the Internal Revenue Code to repeal the excise tax on communication services.  Ross is a co-sponsor of this legislation.

 

Some significant facts regarding the tax refunds include:

  • No immediate action is required by taxpayers. 
  • Refund claims will cover all excise tax paid on long-distance service over the last three years (time allowed given statute of limitations). Interest will be paid on the refunds.
  • The IRS is working on a simplified method for individuals to use to claim a refund on their 2006 tax returns.  
  • Refunds will not include tax paid on local telephone service, which was not involved in the litigation.
  • Originally established in 1898 as a "luxury" tax on wealthy Americans who owned telephones, the federal excise tax on telephone calls is not compatible with today's modern information-age society.

Ross issued the following statement, “I am pleased the Treasury Department decided to repeal the long-distance excise tax.  As a co-sponsor of the Telephone Excise Tax Repeal Act of 2005, I believe Congress needs to act soon in order to alleviate the local excise tax as well.  Phone service is widespread in America, and the overall excise tax costs American families more than $6 billion a year.  The repeal of this tax will save Americans billions of dollars.” 

 

 

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