Federal telephone excise tax

telephone federal excise taxexcise tax on long-distance phone service
The federal telephone excise tax is a statutory federal excise tax imposed under the Internal Revenue Code in the United States under on amounts paid for certain "communications services".wikipedia
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Excise tax in the United States

Excise taxexcise taxesfederal excise tax
The federal telephone excise tax is a statutory federal excise tax imposed under the Internal Revenue Code in the United States under on amounts paid for certain "communications services".
U.S. federal statutory excises are (or have been) imposed under Subtitle D ("miscellaneous excise taxes") and Subtitle E ("Alcohol, Tobacco, and Certain Other Excise Taxes") of the Internal Revenue Code, through, relating to such things as luxury passenger automobiles, heavy trucks and trailers, "gas guzzler" vehicles, tires, petroleum products, coal, vaccines, recreational equipment, firearms (see National Firearms Act), communications services (see telephone federal excise tax), air transportation, policies issued by foreign insurance companies, wagering, water transportation, removal of hard mineral resources from deep seabeds, chemicals, certain imported substances, non-deductible contributions to certain employer plans, and many other subjects.

Spanish–American War

Spanish-American Warwar with SpainSpanish American War
Although the Spanish–American War was short, its financing needs resulted in a federal budget deficit.
To pay the costs of the war, Congress passed an excise tax on long-distance phone service.

Tax resistance

tax resistertax revolttax resisters
Because of this connection to war, the tax has been a frequent target of war tax resisters.
For instance, in the United States, many tax resisters resist the telephone federal excise tax.

Internal Revenue Code

Internal Revenue Code of 1986U.S. tax codeInternal Revenue Code of 1954
The federal telephone excise tax is a statutory federal excise tax imposed under the Internal Revenue Code in the United States under on amounts paid for certain "communications services".

Tax

taxationtaxeslevy
The tax was to be imposed on the person paying for the communications services (such as a customer of a telephone company) but, under, is collected from the customer by the "person receiving any payment for facilities or services" on which the tax is imposed (i.e., is collected by the telephone company, which files a quarterly Form 720 excise return and forwards the tax to the Internal Revenue Service).

Internal Revenue Service

IRSinternal revenueBureau of Internal Revenue
The tax was to be imposed on the person paying for the communications services (such as a customer of a telephone company) but, under, is collected from the customer by the "person receiving any payment for facilities or services" on which the tax is imposed (i.e., is collected by the telephone company, which files a quarterly Form 720 excise return and forwards the tax to the Internal Revenue Service).

United States Congress

CongressU.S. CongressCongressional
In late April 1898, Congress passed a resolution declaring that a state of war had existed since April 21, 1898, between the United States and Spain.

Pollock v. Farmers' Loan & Trust Co.

Income Tax SuitPollock v. Farmers' Loan and Trust CompanyPollock v. Farmers' Loan & Trust Company
In the landmark case of Pollock v. Farmers' Loan and Trust Co. the Supreme Court had nullified the income tax of 1894.

Supreme Court of the United States

United States Supreme CourtU.S. Supreme CourtSupreme Court
In the landmark case of Pollock v. Farmers' Loan and Trust Co. the Supreme Court had nullified the income tax of 1894.

Tariff

tariffscustoms dutyimport duties
Many in Congress felt that tariff increases could create too much disturbance with industry.

War Revenue Act of 1898

Thus, in the War Revenue Act of 1898, an excise tax on telephone service was introduced for the first time in 1898.

Philippine–American War

Philippine-American WarPhilippine InsurrectionFilipino-American War
The tax was repealed in 1902, at the end of the Spanish–American related Philippine–American War.

Woodrow Wilson

WilsonPresident WilsonPresident Woodrow Wilson
On September 4, 1914, President Wilson called upon Congress to raise an additional $100 million through "internal" taxes (in contrast to customs duties).

Customs

customs dutiesCustoms Servicecustom duties
On September 4, 1914, President Wilson called upon Congress to raise an additional $100 million through "internal" taxes (in contrast to customs duties).

World War I

First World WarGreat WarWorld War One
With the entrance of the United States into World War I, revenue needs were greatly increased.

Armistice of 11 November 1918

ArmisticeArmistice with Germany1918 Armistice with Germany
Work on the Revenue Act of 1918 had nearly been completed when the Armistice was signed on November 11, 1918.

Great Depression

DepressionThe Great DepressionDepression era
The 1932 Act was passed in response to a federal budget deficit brought about because of a decline in income tax receipts caused by an economic depression rather than as a result of war.

World War II

Second World WarwarWWII
Just prior to the entrance of the United States into World War II, the Revenue Act of 1941 was passed into law.

Vietnam War

Vietnamwar in VietnamSecond Indochina War
By 1966, however, the federal government's revenue requirements had increased due to escalation of the Vietnam War.

Lyndon B. Johnson

Lyndon JohnsonJohnsonLyndon Baines Johnson
President Johnson requested that Congress enact legislation to restore the rate of the telephone excise tax to the 10 percent rate in effect prior to January 1, 1966, and that successive reductions which had been authorized by the Excise Tax Reduction Act of 1965 be deferred.

Joint resolution

joint resolution of Congresscongressional joint resolutionCongressional resolution
A joint Congressional resolution was approved which temporarily extended the 10 percent rate from March 31, 1968, until April 30, 1968.

George H. W. Bush

George H.W. BushBushGeorge Bush
President George H. W. Bush's budget proposal for fiscal year 1991 called for the permanent extension of the telephone excise tax at the prevailing rate of 3%.

Fiscal year

FYfinancial yeartax year
President George H. W. Bush's budget proposal for fiscal year 1991 called for the permanent extension of the telephone excise tax at the prevailing rate of 3%.

Congressional Research Service

U.S. Congressional Research ServiceCRSCongressional Research Service Report
The general excise tax has so far cost consumers about $300 billion, says the Congressional Research Service.

United States Court of Appeals for the Eleventh Circuit

11th Cir.Eleventh CircuitEleventh Circuit Court of Appeals
On May 10, 2005, The American Bankers Insurance Group won an important victory in the fight against the telephone excise tax, when the United States Court of Appeals for the Eleventh Circuit reversed the decision of the United States District Court for the Southern District of Florida, which had held that the services that ABIG purchased from AT&T were taxable.