Peregrine

The May 26-29, 2006 issue of USA Today ran this story.

Basically, the Federal Excise Tax was introduced in 1898 to help pay for the Spanish-American War. At that time, a tax on phone service was a tax on only the wealthy. The US Department of the Treasury is finally ending this tax.

The result is that all phone companies (including cell phone carriers) must stop charging for the Federal Excise Tax on August 1st. Individuals and business can also file for refunds next year (on your 2006 tax return) to receive a refund for any excise tax paid on long-distance calls since March 1, 2003.

You should read the whole story on USA Today’s website (it’s quite short), as there are some interesting details. For example, there are some narrow circumstances in which you might have to still pay a 3% excise tax.

Here’s hoping you get some bones back next April 15th.