Federal Excise Tax – Eliminated!
Last year, the U.S. Treasury Department announced that the 3% Federal Excise
Tax (FET) would no longer be applied to long-distance telephone service, including
wireless. This is a huge win for wireless consumers who will no longer be forced
to pay this outdated and unfair tax! Additionally, the Internal Revenue Service
(IRS) will be issuing refunds on long-distance services, including wireless,
for the past three years. According to the Treasury Department’s announcement,
eligible taxpayers will be able to apply for this refund with the IRS during
the 2006 federal tax form filing season. The official start of the tax season
began on Tuesday, January 2, 2007, with electronic filing beginning on Friday,
January 12, 2007. The official deadline for the tax season will fall on Monday,
April 16, 2007. According to the IRS website:
“The Telephone Excise Tax Refund (TETR) is a one-time payment available
on your 2006 federal income tax return. It is designed to refund previously
collected long distance telephone taxes. Individuals, businesses and tax-exempt
organizations are eligible to request it.“ Read
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Additionally:
- Refunds will be a part of 2006 tax returns filed in 2007 - claims will cover all excise taxes paid on long-distance services over the last three years (time allowed given statute of limitations).
- The IRS has completed a simplified method for individuals to claim a refund on their 2006 tax returns.
- Interest will be paid on such refunds.
- Refunds will not include tax paid on local telephone service, which was
not part of the litigation.
Please see the IRS website’s ‘Frequently Asked Questions (FAQ)’ sections for additional information about applying for your refund:
- Businesses and Tax-Exempt Organizations
Initially imposed by President William McKinley in 1898 to help fund the Spanish-American War, the Federal Excise Tax (FET) was originally a luxury tax, at a time when only wealthy Americans had telephones. The war lasted only four months, but unfortunately the “Tax on Talk” remained for 108 years.
Prior to this pro-consumer decision made by the U.S. Treasury Department, every person in the United States who made a phone call paid an extra 3% for this outdated tax. Unlike other excise taxes, the money raised through the “Tax on Talk” was not “earmarked” for any specific purpose - not even to improve service or support for the very telecom services that were being singled out for this discriminatory tax! In fact, the “Tax on Talk” made access to wireless services less affordable for many Americans.
Wireless consumers should be proud of the role they played in getting the unfair Federal Excise Tax eliminated. Using MyWireless.org information and tools, America’s wireless consumers sent more than 140,000 messages to federal policymakers asking them for relief from the outdated tax. Elected officials heard from consumers like you that innovative wireless services shouldn’t be subject to an outdated and unfair 108 year-old tax.
