$13B in Taxes Will Go Back To U.S. Callers

WASHINGTON – Telephone callers will see one tax drop off their bills this summer and can look forward next year to a refund of federal taxes paid on long-distance and bundled services.“That’s the taxpayers’ money, and they deserve to have it, not the government,” Treasury Secretary Snow said yesterday, announcing the government’s decision to stop fighting companies that have been successfully challenging the tax in court.Beginning July 31, consumers will stop paying a 3% federal excise tax on long-distance calls and bundled services. Consumers next year can also obtain a refund of taxes paid since March 2003, with interest, by asking for the money back through their 2006 tax returns.Mr. Snow said the Treasury Department expects to send $13 billion back to consumers, but he had no estimate of how much the average individual might receive.Consumers typically pay a few dollars each month for the tax. A caller who pays $50 each month for long-distance calls would pay $18 in taxes in a year, for example.Senator Santorum, a Republican of Pennsylvania, said his tax bill amounts to $3 or $4 each month. “It’s a nice little check for a lot of folks,” he said of the expected refunds.Businesses, some of which found it profitable to challenge the tax with lawsuits, stand to reap the largest returns.“The big impact really is on big corporations with big long-distance bills,” a spokesman for BellSouth Corporation, Bill McCloskey, said.The federal excise tax on local telephone service remains in effect, but Mr. Snow said the administration supports terminating that levy as well. Senate Finance Committee Chairman Charles Grassley, a Republican of Iowa, said he plans to act as soon as possible to move legislation eliminating the remainder of the tax.

$13B in Taxes Will Go Back To U.S. Callers

$13B in Taxes Will Go Back To U.S. Callers

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