Why Are We Paying a 107 Year Old Tax?

The IRS is continuing to collect a 3% luxury tax on wireless users that was created in 1898! Yes, you read that right! 1898!

This tax, imposed by President McKinley in 1898 to finance the Spanish-American War was originally a luxury tax imposed on all owners of telephones. At the time, as you might imagine, this wasn't a whole heck of a lot of people, only the very rich.

Today, that 3% tax imposed to finance a war that lasted only four months is still in place. It is added as an additional excise tax to your cell phone bill every month. It is even added to your auxiliary purchases of things like text messages and ringtones. Unlike other excise taxes, the "tax on talk" is not used to help build the telecommunications infrastructure of the country. In fact, it helps prohibit many people from getting telephone service.

Recently, nine federal courts have ruled the tax unlawful, yet the IRS continues to collect this 107-year-old tax! Currently, wireless users may seek a refund for up to 36 months of past taxes. The process, however, is cumbersome as only three months can be applied for at a time. Go to the IRS web site and ask for form 8849 to request your refund of this outrageous tax.

Then, take your refund and buy some cool ringtones.