LBMC

The answer to this question may very well be YES in the case of the Federal Telecommunication Excise Tax as imposed upon long distance telecommunication services. Congress first imposed the tax on long distance telecommunication services sold to transportation companies to fund the Spanish-American war. Congress revised the tax in 1965 to include a wider range of services and expanded its application to almost all consumers and business, (excluding certain non profits entities, state and local governments, and common carriers). The tax is currently 3% of the gross local and long distance telecommunication service charges incurred by a business. 

In a refund suit to recover the federal communications excise tax, the U.S. District Court for the Northern District of Ohio recently ruled in favor of the taxpayer and against the government on this issue, stating that no tax applies to the long-distance service at issue because “. . . the long-distance service herein does not constitute either 'toll telephone service' or 'local telephone service' under § 4252.” Office Max, Inc., v. United States, Case No.: 1:03CV961 (N.D. Ohio February 13, 2004). The 6th Circuit Court of Appeals has upheld the decision of the circuit court and on March 30 2006, they denied the government's motion for a rehearing in the case. According to published reports in February 2006 Treasury Secretary John Snow indicated that the ruling in the Officemax case could “spur the government to concede its position” BNA Daily Tax Report 04/04/06. 

As a result of this and similar rulings across the country many taxpayers have an opportunity to file refund claims for the telecommunications excise taxes they have paid over the years on their long distance telecommunication services. If you think your company may be entitled to a refund the professionals at LBMC can assist you in making a determination as to which telecommunications services qualifies for the exemption, quantifying the amount of the refund, and processing the refund request. LBMC will do the initial evaluation and consultation at no-cost and make a recommendation on whether a refund claim warranted.

If you are interested please contact:

• Mark Loftis, Nashville 
       (615) 309-2321 or mloftis@lbmc.com
• Mason Barrick, Nashville
       (615) 309-2204 or mbarrick@lbmc.com
• Jay Hancock, Nashville 
       (615) 309-2243 or jhancock@lbmc.com
• Charles Johnson, Knoxville 
       (865) 862-3026 or cjohnson@lbmc.com

For additional information, please contact us at:

This message was sent to you as a result of your previous business interactions with Lattimore Black Morgan & Cain, PC. LBMC is committed to protecting your privacy. We will never rent, sell, or give your e-mail address to any other person or organization.

© 2006 LBMC Family of Companies