“For too long, hardworking Nevadans shouldered this tax burden for the federal government,” said Gibbons.  “It’s time for the federal government to stop padding its coffers with this unfair, unnecessary tax.  Today, the House put this cash cow out to pasture, and I hope the Senate acts on this quickly.”

“In addition to having outlived its original purpose, the tax is highly regressive,” Gibbons added.  “It is more burdensome to Nevada’s senior citizens and low-income families, who spend a higher portion of their income on this tax.”

The federal telephone excise tax (FET) is a “temporary” luxury tax enacted in 1898 to pay for the Spanish-American War.  It is estimated that this tax costs consumers and businesses more than $5 billion annually.

The Phone Tax Repeal Act would eliminate the three percent federal excise tax on telecommunications services, phasing in a complete repeal of the tax over the next three years.  A one percent reduction will occur each year for the next three years, allowing the tax to be fully repealed by October 1, 2002.  The first reduction would take effect 30 days after this bill is enacted into law, the second on October 1, 2001, and the final repeal on October 1, 2002.