Do you remember the Maine?
For those of you who don’t remember history, the battleship USS Maine blew up in the harbor at Havana, Cuba. Even today, the cause of the explosion is still a mystery. But one thing is quite sure, the tragedy of the Maine led to the Spanish-American War.
That’s a nice bit of history, but you may be wondering what this has to do with a tax blog. Well, the war was funded by a tax: an excise tax of 3% on telephone service. This tax, on long-distance calls, continues today.
There’s a problem, though. Does the tax apply to wireless long-distance calls, which are charged based on time, rather than distance? As this article in USA Today notes, an appeals court in Washington, DC ruled that the tax, which has been extended to wireless service, does not apply to wireless service. Consumers are due refunds that total up to $50 billion; however, obtaining the refunds is a time-consuming process. Additionally, because cases are pending in all of the 13 Courts of Appeals, this matter will likely go up to the US Supreme Court and it is unlikely that the IRS will issue refunds until that happens.
Tags: TelephoneTax