Dreier Applauds End Of Long-Distance Phone Excise Tax

May 25, 2006

WASHINGTON, DC - Congressman David Dreier (R-San Dimas,CA), Chairman of the House Rules Committee, applauded an announcement today by the Department of the Treasury that the federal excise tax on long-distance phone service will be terminated.

"There’s an old saying that nothing is more permanent than a temporary tax, and the long-distance excise tax was a prime example," Dreier said. "This was originally a luxury tax levied in 1898 to fund the Spanish-American War. Over the ensuing 108 years, it became a punitive tax on all Americans with no purpose other than to fill government coffers. Every American who pays a long-distance phone bill will get relief. I applaud this decision, and, along with House Republicans, remain committed to reducing taxes so our economy continues to grow and American’s get to keep more of what they earn."

The Treasury estimates that refunds to businesses and taxpayers of the 3 percent tax will total $13 billion. Key Facts Regarding Tax Refunds: (courtesy of the Treasury Department)

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.