Washington, D.C. -  US Rep. Joe Knollenberg (R-Bloomfield Twp.) today voted in support of the Phone Tax Repeal Act, which eliminates a three percent federal excise tax on telecommunications services, including telephone service for consumers.  The repeal of the excise tax will save consumers more that $5 billion annually.
 
“One thing about Washington is that once a tax is on the books, its hard to get rid of it.  Its time to hang up the 102-year-old telephone tax once and for all.  Every American with a telephone will benefit from this tax cut,” said Rep. Knollenberg.
 
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 phase it out and scale it back, and Congress made it a permanent three percent tax on telecommunications services from taxation.

“Today’s bill gives Congress an opportunity to repeal an out-of-date tax that was enacted to finance the Spanish-American War,” said Knollenberg.  “What once was a luxury tax more than a 100 years ago is now a regressive burden on one of the fastest growing sectors of the economy and hits every family in this country with a telephone or an Internet connection.
 
“Repealing this tax removes one more restrictive barrier surrounding communications service. This legislation will encourage growth in the advanced communications sectors and give all Americans a break on their phone bills,” Rep. Knollenberg concluded.