At long last--tax relief!

It took 108 years, five appeals-court rulings, and roughly a decade of congressional protests, but on May 26 outgoing U.S. Treasury Secretary John Snow announced that the federal government will finally permit the 1898 telephone tax to expire.

Initially imposed to raise revenue for the Spanish-American War, the telephone excise tax was revised in 1965 to permit the feds "to tax long-distance calls based on elapsed time, distance, or both," observed the Chicago Tribune. "In 2005, the Internal Revenue Service insisted both types of calls were taxable. The courts ruled the tax did not apply to calls billed in time increments or those covered by a flat-rate plan, as most calls currently are."

Service carriers were required to collect a three-percent excise tax and remit it to the federal government. Several carriers, including OfficeMax Inc. and Hewlett-Packard, led the legal challenge to the tax. Just prior to leaving office, Snow grudgingly announced that the Bush administration is "conceding the issue," and agreed to refund about $13 billion collected through the illegal tax over the past three years.