Gordon Votes To Eliminate Federal Telephone Tax

The Telephone Excise Tax Repeal Act eliminates the 3 percent federal excise tax on telecommunications services over a three-year period. The first tax on telephone service was enacted in 1898 to help pay for the Spanish-American War when telephones were considered a luxury. Only 1,300 households had telephones in 1898.

"Telephone service is a necessity in our information age, not a luxury," Gordon said. "People rely on the telephone for a variety of purposes, especially senior citizens and the disabled.

"Ridding monthly telephone bills, chock-full with various fees, charges and taxes, of the federal excise tax will help those who have to live on fixed incomes," he added.

The federal tax was first applied to long-distance service. In 1941, however, the tax was extended to general phone service, which roughly 94 percent of U.S. households today have. The excise tax currently applies to all telecommunications services, including standard and wireless telephone services, as well as computer connections.

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