This is from a series of pages on sources of federal war spending other than the federal income tax and strategies that war tax resisters can use to reduce their support of the government in these areas.
The Excise Tax on Local Telephone Service
Description
Federal taxes on telephone service were first instituted during the Spanish American War and have frequently been extended or reinstated to fund wars. For this reason, this tax has been a frequent target of war tax resisters. Today the tax only applies to local telephone calls that are billed distinctly from long-distance calls.
There are also a multitude of other taxes, fees, and charges that your phone service provider may tack on to your bill. Some of these are federal taxes, or represent the cost of government charges to the phone company that it passes on to the consumer. For an explanation of some of these charges, see: Understanding Your Telephone Bill.
Amount of the Tax
The tax is 3% of the phone bill for local service.
How Much the Government Collects
In recent years, the government was forced to refund a large amount of illegally-collected telephone excise tax (it had been collecting the tax on long-distance service without legal authorization). Because of this, it is difficult to determine from recent budget figures how much the government will collect from the legal remnant of this tax.
One estimate said that in the government expected to bring in $586 million from the federal excise tax on local telephone service.
How This Tax Is Collected
The end consumer (that is: you, if you’re the customer) is responsible for paying the tax, and the phone service provider is responsible for collecting it and passing it on to the government. If you refuse to pay the tax, the provider is also responsible for notifying the government of your refusal.
Are the Tax Receipts Earmarked?
This tax goes into the federal government’s general fund.
How Can You Resist This Tax?
These days, there are many phone plans that are effectively exempt from this federal excise tax. For example: If your phone plan does not distinguish between local and long-distance calls, but only charges you a fixed per-minute rate for all calls (or offers unlimited calling for a flat fee), you are not liable to pay this tax.
You may also choose to refuse to pay the tax: notifying the phone company of your refusal and deducting the amount of the tax from your phone bill. See How To Refuse the Phone Tax for details on how to do this.
See Also
- Hang Up on War! — a site with much more thorough information on telephone war tax resistance
