One of the reasons why I dropped my landline service and went with cable broadband and Vonage is that the taxes (fed, state, and local) applied to telephone service are egregious and significantly increase the cost of the services. If there were ever a case against “special purpose” or “limited duration” taxes, this would be it… it takes a hell of a lot of effort for the government to give up a tax receipt.
TaxProf Blog: Can You Hear Me Now? IRS to Refund $15 Billion of Telephone Taxes to Consumers
The Treasury Department and IRS announced this morning that after losing in five circuit courts of appeals, the Government is throwing in the towel and will no longer seek to enforce the 3% excise tax on long-distance telephone calls enacted during the Spanish-American War of 1898 as a “luxury” tax on wealthy Americans who owned telephones.