§4251 — Imposition of tax
9 cases·3 followed·1 overruled·5 cited—33% support
Statute Text — 26 U.S.C. §4251
There is hereby imposed on amounts paid for communications services a tax equal to the applicable percentage of amounts so paid.
The tax imposed by this section shall be paid by the person paying for such services.
For purposes of subsection (a)—
The term “communications services” means—
local telephone service;
toll telephone service; and
teletypewriter exchange service.
The term “applicable percentage” means 3 percent.
For purposes of subsections (a) and (b), in the case of communications services rendered before November 1 of a calendar year for which a bill has not been rendered before the close of such year, a bill shall be treated as having been first rendered on December 31 of such year.
For purposes of this subchapter, in the case of communications services acquired by means of a prepaid telephone card—
the face amount of such card shall be treated as the amount paid for such communications services, and
that amount shall be treated as paid when the card is transferred by any telecommunications carrier to any person who is not such a carrier.
In the case of any prepaid telephone card which entitles the user other than to a specified dollar amount of use, the face amount shall be determined under regulations prescribed by the Secretary.
For purposes of this subsection, the term “prepaid telephone card” means any card or any other similar arrangement which permits its holder to obtain communications services and pay for such services in advance.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §49.4251-1 Imposition of tax
- Treas. Reg. §Treas. Reg. §49.4251-1(a) In general.
- Treas. Reg. §Treas. Reg. §49.4251-1(b) Termination of tax on general telephone service.
- Treas. Reg. §Treas. Reg. §49.4251-2 Rate and application of tax
- Treas. Reg. §Treas. Reg. §49.4251-2(a) Rate of tax.
- Treas. Reg. §Treas. Reg. §49.4251-2(b) Amounts paid.
- Treas. Reg. §Treas. Reg. §49.4251-2(c) Liability for, and return of, tax.
- Treas. Reg. §Treas. Reg. §49.4251-4 Prepaid telephone cards
- Treas. Reg. §Treas. Reg. §49.4251-4(a) In general.
- Treas. Reg. §Treas. Reg. §49.4251-4(b) Definitions.
- Treas. Reg. §Treas. Reg. §49.4251-4(c) Determination of face amount—(1) Dollar card.
- Treas. Reg. §Treas. Reg. §49.4251-4(d) Liability for tax—(1) In general.
- Treas. Reg. §Treas. Reg. §49.4251-4(e) Examples.
- Treas. Reg. §Treas. Reg. §49.4251-4(f) Effective date.
9 Citing Cases
In connection with that bankruptcy, an affiliate of taxpayer 3 pursued refund claims for overpaid section 4251 excise taxes.
Section 4251 imposes an excise tax on "communication services". After certain Federal courts held that the excise tax was invalid with respect to certain communication services, see Nat'l R.R. Passenger Corp. v. United States, 431 F.3d 374 (D.C. Cir. 2005); OfficeMax, Inc. v. United States, 428 F.3d 583 (6th Cir. 2005); Am. Bankers Ins. Grp. v. Uni
Section 4251 imposes an excise tax on "communications services", and in 200 6 the Government conceded the non-taxability of most long-distanc e telephone service and undertook to refund the tax to 160 million taxpayers . See Notice 2006-50, 2006-l C .B . 1141 . The means chosen for making the telephone excise tax refund (TETR) was the - 12- income