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.