News Release

Washington, DC –An outdated phone tax is one step closer to elimination, said Idaho Senator Mike Crapo, after the Senate Finance Committee, on which he sits, approved a measure today to end the excise tax on local phone service.

This measure was approved after the U.S. Treasury Department announced last month it would repeal the excise phone tax on long-distance service. That move retroactively refunded the past three years of the three percent long-distance tax, but congressional action is required to eliminate the local excise tax. Excise taxes were first imposed in 1898 as a tax on wealthy individuals as phones were considered a luxury item. The revenue from the tax was originally used to fund the Spanish-American War.

“Congress needs to do its part in following Treasury’s repeal of the long-distance excise tax by eliminating the excise tax on local service,” Crapo said. “Our tax laws need to be compatible with our technology age. The long-distance excise tax removal was a start to catch up with technology and this measure will end this unnecessary tax.”

Crapo is an original co-sponsor of the legislation approved today by a voice vote. It now goes before the full Senate for further consideration.