Rep. Cole Announces Repeal of Long-Distance Excise Tax

Rep. Cole Announces Repeal of Long-Distance Excise Tax

Congressman Tom Cole announced today that the U.S. Treasury Department will repeal the federal excise tax on long-distance telephone service. The Internal Revenue Service 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.

"The repeal of the federal excise tax is good news for all American taxpayers who have a monthly long distance bill. This tax was way behind the times--dating back to the Spanish American War," Congressman Tom Cole said. "I hope that we will be able to make even more progress on updating and simplifying our tax code this year in Congress."

The federal excise tax on long-distance telephone service was established in 1898 as a luxury tax on wealthy Americans who owned telephones. The IRS will be refunding about $15 billion of telephone taxes collected from American taxpayers over the last three years.

Following is information from the IRS regarding these 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 by the Department of Justice.

http://www.house.gov/list/press/ok04_cole/longdistancetax.html