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April 17, 2006

Federal Excise Tax - The War is Over!!!

by Darla


How many of you pay attention to your wireless bill each month?  Did you ever wonder or show concern for that section that says "Taxes, Fees and Surcharges"?   

The Federal Excise Tax or FET was first instituted in 1898 to finance the Spanish-American War.  Each month there is a 3% tax added to the bill of every wireless user in America.  I'm sorry... do they not know that the war is over?  An article posted last year from USA Today mentions that the general excise tax has so far cost consumers about $300 billion.  The entire Spanish-American War cost only about $6 billion, adjusted for inflation.

via: CTIA.org

“Today’s wireless user is buried under a heap of taxes and fees.  The average wireless subscriber in America pays more than 17% of his or her monthly bill in taxes and fees. That’s nothing short of outrageous. The fact that government is punishing citizens who choose to make their lives more productive, efficient and enjoyable through innovative wireless technology makes no sense at all.”   CTIA President and CEO Steve Largent

According to MyWireless.org wireless consumers may currently seek a refund for up to 36 months of past taxes.  However, one refund claim form is required for each calendar quarter (up to 3 months) of bills.  Man its a good thing I have all of my bills from day one.

Form 8849 Claim for Refund of Excise Taxes is available on the IRS website or can be downloaded here
I URGE all of the US residents to check out MyWireless.org for more info.


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Antony Pranata

I don't live in the US, so I am not so familiar with this topic.
However, looking at your bill, it seems that US has so complicated tax system.
I can't believe that you have 5 different taxes only for "wireless bill"!

I have lived in Germany for more than 4 years, and I never noticed that I pay tax for my "wireless bill" (it's because the subscription fee and usage fee already include tax).


Yes, they should end this tax. The USA bought us (the Philippines) more than a hundred years ago!

Shivering Timbers

I'm not sure where MyWireless.org got the idea that consumers can get a refund of the telecom excise tax. As near as I can tell from IRS publication 510 (which describes all the zillions of excise taxes), the only consumers due a refund are military personnel serving overseas, and then only for the excise taxes on those particular calls made from overseas.

I hate to be a wet blanket, but I'd find a tax lawyer before trying to file an 8849 for telecom excise taxes. The IRS can slap you with fines for filing bogus claims, and generally make things pretty miserable.

Amy Alkon

Darla, linked to this entry of yours on my blog (dunno why it doesn't show up in your trackbacks)...but a guy on my site, in the comments about this, says maybe you're getting in trouble with the IRS trying to get a refund on the excise tax. Here's the link to his comment.



You will notice on the irs website that you can only receive a refund from Fed Excise tax paid after Feb 28th, 2003 through July 31, 2006 and ONLY on your 2006 tax return. 8849 is the incorrect form. See Notice 2006-50...


The last poster is correct. Individuals must file a 2006 1040 return to claim the refund. The IRs is trying to make the process SIMPLE by providing 2 options a. actual amount or b. a safe harbor (flat rate) amount.

As an accountant, I would suggest we all start collecteing our old landline and wireless bills from 3/1/03 to 5/28/06. In general, the tax is 3% of your bill. Determine which method will provide the greatest refun. If option "b", remember that it does not require documentation. I am sure the IRS will limt option"b" to one line and does not take into account multiple landlines or wireless numbers!! At any rate, it will be this fall before the amount is determined.

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