This was posted by Frank Muto to the isp-clec list and should be of
interest to many of the isps on this list.
Basicly it says that the tax on long distance was illegal to collect and
there is a refund due you.
George
Credit goes to Frank Muto
--
George Rogato
Welcome to WISPA
www.wispa.org
-------- Original Message --------
Subject: [isp-clec] Treasury disconnects tax on long-distance calls -
with refunds
Date: Thu, 25 May 2006 11:47:25 -0400
From: Frank Muto <[EMAIL PROTECTED]>
Reply-To: isp-clec@isp-clec.com
To: isp-clec@isp-clec.com
Treasury disconnects tax on long-distance calls
WASHINGTON (MarketWatch) - The brief Spanish-American War ended more than a
century ago, but not the federal tax assessed to fund the victory.
Until now.
On Thursday, the U.S. Treasury said it would stop collecting the 3% federal
excise tax on long-distance calls, a fee originally assessed in 1898. The
government also said it will issue refunds requested by consumers and
businesses that paid the fee over the past three years. Taxpayers will be
able to request refunds when they file 2006 tax returns in early 2007.
The Treasury also said the Justice Department would cease litigation in
support of the tax after a handful of federal appeals courts ruled the fee
illegal in decisions rendered within the past year. The most recent loss in
federal court occurred earlier this month.
"The Federal Appeals courts have spoken across the board," Treasury
Secretary John Snow said in a statement. "It's time to 'disconnect' this
tax
and put it on the permanent 'do not call' list."
The tax, which generates more than $6 billion annually, has survived
repeated efforts to eliminate it, most recently in 2000, when President
Bill
Clinton vetoed a larger bill that included a repeal of the excise fee.
Bills
aimed at ending the tax have circulated every year since.
For decades, long-distance companies such as AT&T Inc. have been
required to
collect the excise fee from customers and pass it on to the federal
government. Yet some large corporations such as Hewlett Packard
successfully
sued to get rid of the tax, claiming it was illegal. Others have won large
refunds from the IRS.
The excise tax works out to $1.50 per every $50 in long-distance calls, not
a particularly large sum for consumers. Yet for a business that spends,
say,
$10,000 a month on long-distance calls, the tax would equal $300 a month or
$3,600 a year.
If the tax remained in place over the next decade, it would have generated
about $67 billion for the federal coffers, a congressional panel estimates.
Altogether, the excise has raised more than $300 billion in its entire
existence, the Congressional Research Service found.
The excise fee was originally established in 1898 on long distance because
phones were considered a luxury and only the wealthiest Americans could
afford service. These days, the tax affects all consumers directly or
indirectly, no matter what their annual income. In announcing his decision,
Treasury Secretary Snow also called on Congress to eliminate federal taxes
on local phone calls. That tax is separate from the long-distance fee.
Frank Muto
Co-founder - Washington Bureau for ISP Advocacy - WBIA
Telecom Summit Ad Hoc Committee
http://gigabytemarch.blog.com/ www.wbia.us
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--
George Rogato
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