Secretary Snow Announces End to Long Distance Telephone Excise Tax Voices support for full repeal of the Spanish-American War tax

WASHINGTON – Treasury Secretary John Snow announced this morning that the Internal Revenue Service (IRS) would no longer collect the federal long distance telephone excise tax, part of a 108-year-old “temporary” tax enacted to fund the Spanish- American War in 1898. Following eleven consecutive losses by the IRS before the federal courts, the IRS will issue refunds of tax on long-distance service for the past three years.

While the Spanish-American War tax was originally sold to the American people as a luxury tax in1898, when only the wealthiest Americans had phones, the telephone is now a ubiquitous part of American life. The tax is therefore highly regressive, as it represents a greater share of the income of poorer Americans.

Secretary Snow also voiced his support for full repeal of the Spanish-American War tax, saying, “In addition to ending the litigation, I would like to call on Congress to terminate the remainder of this antique tax by repealing the excise tax on local service as well.”

“I applaud the Treasury for doing away with this illegal tax,” said taxpayer advocate Grover Norquist, president of Americans for Tax Reform. “The next logical step is for Congress to enact a full repeal of this antiquated, unfair and unpopular tax. Full repeal is a major priority of the taxpayer movement, and I am pleased to have Secretary Snow’s support in that effort."

Legislation is pending in both houses of Congress to repeal the Spanish-American War tax. H.R. 1898 in the House, sponsored by Rep. Gary Miller (R-CA) currently has 184 co-sponsors.