Thompson- Connolly Bill Seeks Repeal of Telephone Excise Tax

May 5, 2009
Press Release

WASHINGTON, DC –Congressmen Glenn `GT’ Thompson (R-Howard) and Gerry Connolly (D-VA)  have sponsored legislation to repeal the 3 percent federal telephone excise tax that was first imposed in 1898 to help fund the Spanish American War.  It is time to “hang up on the telephone excise tax,” they said.

In urging their colleagues to support H.R. 2203, the Telephone Excise Tax Repeal Act of 2009, the two Congressmen said the repeal of the tax “is long overdue.”  The 3 percent federal tax is collected on local telephone service, toll telephone service, and teletype exchange service for the disabled.

“This tax is an antiquated remnant from the Spanish American War.  It funds no specific program today and its revenues go to the general Treasury,” said Thompson. “It is time to get rid of this tax that affects those least able to afford it.”

“The telephone excise tax is particularly unfair and regressive because it targets those  lower income, disabled, and older Americans and families who rely solely on landlines for communications,” Connolly said.  “By eliminating the 3 percent federal telephone tax, we can cut taxes for many Americans by more than 1.2 billion over the next decade.”

The federal telephone excise tax was repealed or expired three times – in 1902, 1916, and 1924 – but each time it was reinstated by Congress.  The current tax was passed in 1932 and has remained continuously in place ever since.

Legislation to repeal the federal telephone excise tax has won bipartisan support in previous sessions of Congress, but those bills stalled and never cleared both houses of Congress.

Cell phone service and long distance landline service were exempted from the tax in 2006.  Bundled communications services, including Voice over Internet Protocol, are also not subject to the tax.