IRS ends long-distance phone tax — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
The IRS says it will stop collecting the federal excise tax on long-distance telephone service and will refund excise taxes paid—plus interest— since Feb. 28, 2003. (IRS Notice 2006-50) Individuals and small businesses will be able to file for the refunds with their 2006 returns. The IRS says it will devise a simplified method of filing for the refund, “so taxpayers won’t have to spend time digging through old telephone bills.” The announcement follows decisions in five federal appeals courts holding that that the tax—currently at 3 percent— does not apply to long-distance phone calls. It does, however, still apply to local phone service.