Fandom

The IT Law Wiki

Federal telephone excise tax

32,167pages on
this wiki
Add New Page
Talk0 Share

Ad blocker interference detected!


Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.

Overview Edit

The 3% federal telephone excise tax on communications services was established in 1898 to assist with financing the Spanish-American War and continued for the same purpose for World War I. Before the widespread use of the telephone following World War II, the tax was considered a “luxury” tax. Although the tax was scheduled for elimination over several decades, American consumers continue to pay the 3% federal tax on all local and long-distance service today. It is the third largest federal excise tax behind those on tobacco and alcohol.

There are several ways to access the Internet, including telephone, cable, and wireless infrastructures. The 3% federal excise tax applies to communications services, however, the boundary between taxable communications services and other telecommunications and information services is often unclear. This issue is becoming more complex as traditional and non-traditional service providers offer bundled services to consumers.

The 3% federal excise tax does not apply to sales of Internet access. However, the tax is typically applied to the local or long-distance telephone system calls used to reach ISPs. Other technologies can be used to reach ISPs but may not be subject to this tax.

Also on Fandom

Random Wiki