Telephone Tax History Timeline

1898
Temporary tax on telephone toll (long distance) services adopted to help fund the Spanish-American War.
1902
Tax repealed.
1914
Long distance “luxury” telephone tax is imposed at a rate of 1 cent per call to help pay for some of the costs of World War Ⅰ.
1916
Tax is repealed.
1917
Tax is reinstated at a rate of 5 cents per call once the United States enters the war.
1919
Tax is expanded to cover additional telephone services.
1924
Telephone excise tax is repealed.
1932
Tax is reinstated at per-call rates ranging from 10 cents to 20 cents, depending on the call’s cost, but set to expire in 1934.
1933–1940
Tax is regularly extended.
1941
Tax applied to local service for the first time (6%).
1942
Tax rate is changed to a flat 20 percent rate.1943Tax rate is increased to 25 percent.
1951
Franklin Zahn became the first telephone war tax resister by refusing the 15% federal tax during the Korean War. When the refused tax reached $1.59,  Bell Telephone disconnected his telephone service. Zahn continued refusal until the end of war  in 1953, then resumed his refusal during the Vietnam War. These stories are told in his book Deserter from Violence.
1954
Tax rate is reduced to 10 percent.
1959
Tax rate is slated to expire in 1960.
1960 to 1964
Expiration schedule is delayed annually.
1965
As part of the excise tax reform project, the 10 percent communications excise tax is scheduled to be phased out over three years.
1966
  • Phase-out delayed for one year. Chairman of the House Ways and Means Committee Wilbur Mills states, “It is clear that Vietnam and only the Vietnam operation makes this bill necessary.”
  • Doris Sargent writes letter to Peacemaker (April 2) suggesting resisting the phone tax. (Copy below)
  • Chicago resister Karl Meyer writes the brochure “Hang Up on War”; WRL launches first telephone tax resistance campaign.
1968
  • Phase-out restructured to conclude in 1973.
  • Telephone tax resistance case of Martha Tranquilli leads to ruling that phone service may not be disconnected for nonpayment of federal tax.
1969
Phase-out delayed for one year.1970
  • Schedule replaced by a 10-year plan beginning in 1973.
  • As a result of the increased war tax resistance (income and telephone) during the Vietnam War, the IRS seized at least 30 vehicles and five houses between 1967 and 1976. (Click here for more on property seizures.) Bob Marcus had his car seized for $1.25 in telephone tax and it was auctioned for $277 (Colorado).
1971
Lillian and George Willoughby’s Volkswagen bug auctioned by IRS for $123 in telephone tax. (Pennsylvania)
1972
  • Telephone war tax resisters number up to 500,000.
  • The IRS seized a year-old car owned by Arnold Cuba for $2.44 in unpaid telephone tax. The car was returned a week later (because his bank account was seized instead). (Texas)
1973
  • Phase-out begins.
  • IRS attempts to seize a house in Colorado Springs for $7 in unpaid phone tax, but backs off.
  • IRS auctions Jim Glock’s bicycle for $22 telephone tax. (Texas)
1981
Excise tax down to 1 percent but elimination is deferred. 1 percent is extended through 1984.
1982
Tax rate is increased to 3 percent with elimination in 1985.
1984
3 percent rate is extended through 1987.
1987
3 percent rate is extended through 1990.
1990
3 percent excise tax made permanent.
2000
Congress votes to repeal the tax, but full tax bill vetoed by President Clinton.
2003
Online Hang Up On War campaign begins.
2005
IRS announces it will continue to collect telephone excise tax on all services in defiance of U.S. Court of Appeals (11th Circuit) ruling against certain applications of the tax.
2006
  • Long distance telephone tax ends on July 31, 2006, after the government loses five appellate decisions on cases brought by big corporations.
  • Legislation introduced in Congress to repeal the federal excise tax on all telephone service.
2009
  • Legislation again introduced in Congress to repeal the federal excise tax on all telephone service; didn’t go anywhere.
  • Refusal to pay continues despite hassles from phone companies.
2013
Legislation again introduced in Congress to repeal the federal excise tax on all telephone service. The Telephone Excise Tax Elimination Act of 2013 was referred to the Finance Committee.
2014
The tax remains on local landline calls.

Sources: Congressional Research Service report by Louis Alan Talley, (1/4/2001), and War Tax Resistance, published by the War Resisters League.


1966

To the Editor:

A peace group in Yellow Springs has suggested that I send you a proposal I have already sent to WSP and NCCEWVN. This idea has probably occurred to many of us.

People opposed to the war in Vietnam have tried protest marches, vigils, demonstrations, lobbying, visits to congressmen, various other forms of nonviolent protest. Many have fasted and, as we sadly know, a few have made torches of themselves. Some have tried civil disobedience. Many pacifists favor nonpayment of income taxes. While dramatic, this has not always had the impact it should. What we want is to end the fighting in Vietnam. I believe that we have in our hands a tool to really, at last, make an effective impact and actually make a point.

Fighting uses men; fighting men need money to support them and provide armaments. In a grandiose gesture the president reduced the excise tax on cars and telephone bills. Now he proposed to return these two taxes. They are admittedly earmarked for the Vietnam fight. If all of us in the United States who want this fighting ended ask the telephone company to remove our telephones, clearly stating our reason, this could really be effective. Of course this involves very real sacrifice but, if we are in earnest, we should be willing to make such a sacrifice. But we’d all have to do it; a lone person here and there will do no good at all.

Since talking over this proposition with a small group gathered to talk about tax refusal, I am adding the two suggestions they made: (1) Pay the telephone bill but refuse to pay the tax; (2) reduce long distance calls. The first might be acceptable, but I cannot see how the second would be unless both the telephone company and the government knew about it.

Of course we should not buy new cars either. As an additional thought, many congressmen are “screaming” now about costs for Vietnam and the lack of money for the anti-poverty program. Perhaps we should play up this economic issue, for the time being, rather than the moral one.

Doris E. Sargent
Yellow Springs, OH
Peacemaker, April 2, 1966