Washington, D.C.: Congressman Ernie Fletcher (R-KY) voted to repeal the outdated Spanish-American War Telephone tax. The federal telephone excise tax was first imposed as a temporary luxury tax in 1898 when Congress needed funds to fight the Spanish American War. The bill passed in the full House.

        "I have received confirmation from the Ambassador of Spain that Spanish-American War is officially over and that Spain has no intentions of starting another war with America," said Fletcher. "On a more serious note, this is a classic example of how -- once imposed -- taxes never seem to die in Washington. I am proud to be a part of the process that is working for tax fairness in America," continued Fletcher. "102-years later, Congress has finally voted to end the temporary telephone excise tax," said Fletcher. "This outdated tax not only punished those trying to stay in touch over the phone, but also those trying to access the Internet. Approximately, 95% of Americans go on-line over their home telephone lines," continued Fletcher. "I strongly believe that by repealing this tax we are fostering Internet use, not cutting it off."

Background:

Congress first enacted a telephone excise tax in order to help pay for the Spanish-American War in 1898. At the time, this "temporary" tax amounted to a penny on long-distance phone calls costing more than 15 cents. Over the years, the federal phone tax has survived efforts to eliminate it or scale it back, and Congress made it a permanent 3% tax on telecommunications services in 1990.

Of the 105.4 million households in America, 99.1 million (94%) have telephone service. The telephone tax repeal would provide tax relief to every one of those households.

Additionally, because of the rapid pace of technological change, the difference between traditional telecommunications, the Internet and other technologies is increasingly unclear. If the federal phone tax remains on the books, it would jeopardize recent efforts to keep the Internet free from taxation.

        "Today we have repealed the tax on talking," said Fletcher. "The telephone is a necessity in American households, not a luxury. Most importantly it shouldn’t be used as yet another vehicle for the IRS and Washington to take more of hardworking Americans’ money," continued Fletcher. "I am proud to have voted to disconnect the IRS from the outdated Spanish-American War Telephone Tax."