Telephone Excise Taxes

Telephone Excise Taxes

August 01, 2005

Telephone excise taxes remain in play.

A former top official in the US Department of Justice said in June that the government will probably try to argue a telephone excise tax before another appeals court before giving up on the tax. The United States collects a 3% excise tax on long-distance telephone calls, but the statute is badly out of date. It only applies to calls that are billed based on time and distance. Most telephone companies no longer bill on that basis.

Large companies have been suing the government to get back taxes that their telephone companies collected. The government has lost several such cases recently, including a key decision in May in a US appeals court for the 11th circuit.

The former Justice Department official said the government will probably try to persuade another appeals court to uphold the tax before conceding. Kent Jones was the tax assistant to the US solicitor general from 1990 to 2004.

 Keith Martin