Telco Long Distance Tax Abolished

Technocrat

Telco Long Distance Tax Abolished

zogger

Thu May 25 18:21:22 -0700 2006

Politics.

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The government has finally admitted that we won the Spanish American war over a century ago, so they have decided to drop the telco long distance tax, that was established to fund said war.

"The U.S. Treasury Department today announced it is conceding the legal dispute over the federal excise tax on long-distance telephone service. The Department of Justice will no longer pursue litigation and the Internal Revenue Service (IRS) will issue refunds of tax on long-distance service for the past three years. Taxpayers will be able to apply for refunds on their 2006 tax forms, to be filed in 2007.

Treasury Secretary John Snow states, "Today is a good day for American taxpayers; it marks the beginning of the end of an outdated, antiquated tax that has survived a century beyond its original purpose, and by now should have been ancient history.

"The Federal Appeals courts have spoken across the board. It's time to `disconnect' this tax and put it on the permanent `do not call' list.

"In addition to ending the litigation, I would like to call on Congress to terminate the remainder of this antique tax by repealing the excise tax on local service as well."

Key Facts Regarding Tax Refunds:

No immediate action is required by taxpayers.
Refunds will be a part of 2006 tax returns filed in 2007.
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 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."

Telephone bills will not reflect the changes

lars

Thu May 25 19:18:37 -0700 2006
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Unfortunately the telephone bills will not reflect even symbolic change.
I recall some years ago when one of the taxes on air travel expired, the airlines continued to collect the same rates from passengers as when the tax was active. When the tax was re-instated, the airlines increased their rates.
With the telcos specifically, I recall seeing a 15.0% increase in my monthly bill. When I took it up with the company, they blamed it on a new tax. At the bottom of it, the tax was about 0.19% of my bill and the rest 'handling fees'. So I am sceptical as to whether there will be any improvement in long-distance fees.
However, what is interesting is that this tax from 1898 is being dropped in part because telephones are a basic service and no longer a luxury. One could make the same argument for Internet traffic and general interoperability. Once things become basic services, then the vendors must behave as common carriers. ICT seems to have crossed into the realm of basic service and thus ought to be obligated to no longer discriminate on content.

Telephone bills will not reflect the changes

Martin Blank

Sun May 28 20:09:29 -0700 2006
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It depends on your state. The California Public Utilities Commission is pretty aggressive when it comes to pricing changes -- all of them have to be reviewed and approved. Removal of the tax -- all of which must be specifically listed -- should mean slightly lower bills for those who paid it until now.