Telecom Tax Refund

December 13, 2005

Companies such as Convergys, a very large contact center outsourcer and telecom billing company will receive a six million dollar refund due to the fact that a telecom tax of 3% has been ruled unlawful. A staggering $9 billion dollars are owed consumers who have already paid these taxes. The tax exemption covers VoIP, cell phones and one-third of long-distance calls.

According to this article, on Friday, a court in Washington, D.C., became the third federal appeals court since May to void the tax. Two other federal appeals courts, covering seven states, have ruled the tax unlawful, and cases are pending elsewhere in the nation's 13 appeals courts. In all, nine federal courts have ruled that a 3% federal tax doesn't apply to phone calls that are priced only by how long a person talks - not by how far the call travels.

The challenge is collecting the refund as a person entitled to a $50 refund would have to fill out forms a dozen times to get the three years' worth of refunds permitted under tax law. Collecting records and preparing the form would take about seven hours.