PSC Issues Telephone Tax Refund Reminder

The North Dakota Public Service Commission wants to remind people that they can receive a refund on their 2006 tax return for a telephone tax that is no longer being collected.

The IRS announced in May that the agency would no longer collect the excise tax, which was first implemented in 1898 to help fund the Spanish-American war. The IRS stopped collecting the tax after facing several court challenges.

The IRS will refund the taxes paid on long-distance or bundled service billed to taxpayers for the period after Feb. 28, 2003, and before Aug. 1, 2006. There will be an additional item on the 2006 tax return that allows individuals to receive a refund ranging from $30 to $60 without digging out their old phone bills. People can also itemize their actual tax paid if they believe they paid more than the standard credit over the allowable time period. Businesses will also be able to claim a refund for the tax, but they will have to base their refunds on the actual amount they paid by filling out form 8913.

Commissioner Tony Clark, who holds the telecommunications portfolio for the PSC, said it’s good for taxpayers to know about the refund when they see it on their federal income tax form.

“If people understand what the refund is for ahead of time, it will make tax time a little easier,” Clark said.

Commissioner Susan Wefald said the refund will lighten the tax burden for many people.

“We want to make sure that people are aware that this is a tax refund, not a tax deduction,” Wefald said. “What it means is that many individuals will pay between $30 and $60 less in taxes.”

Commissioner Kevin Cramer said people can call the PSC or log onto www.irs.gov if they have questions about the tax.

“The PSC is happy to help consumers find out how to collect the tax refund,” Cramer said.

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