Congress first enacted a telephone excise tax to help pay for the Spanish-American War in 1898. Back then, this "temporary" tax amounted to one penny on long-distance phone calls costing more than 15 cents. Over the years, the federal phone tax has survived several attempts to phase it out and scale it back. Congress made it a permanent 3 percent tax on telecommunications services in 1990. 

“The Spanish American War Telephone Tax is a relic of the 19th Century -- back in the days of Teddy Roosevelt and the Rough Riders," said Camp. "It's time to make the phone tax surrender after its 102-year battle with the American people.  The tax is unfair and this repeal provides direct tax relief to almost every household."
 
The tax applies to phone services such as subscriber line charges, add-on features like call-waiting and caller ID, toll call services, directory assistance, and long distance and wireless.  “This is just another example of how Washington DC has taken the taxpayer’s money for a war that started in 1898 and ended over one hundred years ago.  I am pretty sure we have paid off the Spanish-American War, ” Camp said.  “The last time I checked, the telephone was a necessity, not a luxury.”

The bill passed the house today with a vote of 420 to 2.