The refunds are due to the repeal of a 3 percent excise tax that had been levied for decades on long-distance bills of telephone customers, whether they used fixed lines, cell phones or Internet telephones. Long-distance portions of fax lines and dial-up Internet connections also are in the basket of services that are no longer subject to the tax. In May, the U.S. Department of the Treasury and the Internal Revenue Service scrapped the long-distance portion of the 108-year-old tax after it was challenged by a group of Fortune 500 corporations. While the tax continues to be levied on local lines, it disappeared from monthly bills for long-distance calls starting in August, and the IRS is returning taxes collected between March 2003 and July 2006, along with interest.
STEP-BY-STEP GUIDE TO REQUESTING YOUR BUSINESS' PHONE TAX REFUND from BizJournal 1. Gather your monthly phone bills going back to March 2003 and until August. 2. Add up the amount spent on long-distance calls and faxes. 3. Calculate 3 percent of that amount - that's the money the federal government collected as excise tax. 4. When filling out your 2006 tax return enter the amount for the refund in the allotted column. 5. Watch your mail for a refund check.