A few weeks ago I wrote about the demise of the tax on long-distance telephone calls. Today, I can report that the Senate Finance Committee just passed legislation to kill the tax on local calls as well. It's now on to the full Senate for consideration.
I talked to Sen. Max Baucus, D-Mont., who spearheaded the effort, and he explained that the tax on local calls is regressive and has long outlived its usefulness. The tax on long-distance calls is scheduled to disappear from your phone bills on July 31. Starting next year, the government will reimburse three years worth of taxes on long-distance calls, including any plans that combine local and long-distance calling. You will be able to file for a refund on your 2006 federal income tax returns. Tax experts figure the typical household pays $18.36 a year in federal excise taxes, or $55 over three years. The IRS has not decided the size of the standard refund for individuals, but taxpayers who use the phone a lot will be able to apply for a larger refund if they can document how much they paid in excise taxes. So I guess we can say that the Battle of San Juan Hill was not only won, but it has been paid for too!