Internal Revenue Code:Sec. 4251. Imposition of tax
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 33 - FACILITIES AND SERVICES
Subchapter B - Communications
Statute
Sec. 4251. Imposition of tax
(a) Tax imposed
(1) In general
There is hereby imposed on amounts paid for communications
services a tax equal to the applicable percentage of amounts so
paid.
(2) Payment of tax
The tax imposed by this section shall be paid by the person
paying for such services.
(b) Definitions
For purposes of subsection (a) -
(1) Communications services
The term ''communications services'' means -
(A) local telephone service;
(B) toll telephone service; and
(C) teletypewriter exchange service.
(2) Applicable percentage
The term ''applicable percentage'' means 3 percent.
(c) Special rule
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.
(d) Treatment of prepaid telephone cards
(1) In general
For purposes of this subchapter, in the case of communications
services acquired by means of a prepaid telephone card -
(A) the face amount of such card shall be treated as the
amount paid for such communications services, and
(B) 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.
(2) Determination of face amount in absence of specified dollar
amount
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.
(3) Prepaid telephone card
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.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 503; Pub. L. 85-859, title I,
Sec. 133(a), Sept. 2, 1958, 72 Stat. 1289; Pub. L. 86-75, Sec. 5,
June 30, 1959, 73 Stat. 158; Pub. L. 86-564, title II, Sec.
202(a)(2), June 30, 1960, 74 Stat. 290; Pub. L. 87-72, Sec.
3(a)(2), June 30, 1961, 75 Stat. 193; Pub. L. 87-508, Sec. 3(a)(2),
June 28, 1962, 76 Stat. 114; Pub. L. 88-52, Sec. 3(a)(2), June 29,
1963, 77 Stat. 72; Pub. L. 88-348, Sec. 2(a)(2), June 30, 1964, 78
Stat. 237; Pub. L. 89-44, title III, Sec. 302, title VII, Sec.
701(b)(2)(B), June 21, 1965, 79 Stat. 145, 156; Pub. L. 89-368,
title II, Sec. 202(a), Mar. 15, 1966, 80 Stat. 66; Pub. L. 90-285,
Sec. 1(a)(3), Apr. 12, 1968, 82 Stat. 92; Pub. L. 90-364, title I,
Sec. 105(b)(1), (2), June 28, 1968, 82 Stat. 265; Pub. L. 91-172,
title VII, Sec. 702(b)(1), (2), Dec. 30, 1969, 83 Stat. 660; Pub.
L. 91-614, title II, Sec. 201(b)(1), (2), Dec. 31, 1970, 84 Stat.
1843; Pub. L. 96-499, title XI, Sec. 1151, Dec. 5, 1980, 94 Stat.
2694; Pub. L. 97-34, title VIII, Sec. 821, Aug. 13, 1981, 95 Stat.
351; Pub. L. 97-248, title II, Sec. 282(a), Sept. 3, 1982, 96 Stat.
568; Pub. L. 98-369, div. A, title I, Sec. 26, July 18, 1984, 98
Stat. 507; Pub. L. 99-514, title XVIII, Sec. 1801(b), Oct. 22,
1986, 100 Stat. 2785; Pub. L. 100-203, title X, Sec. 10501, Dec.
22, 1987, 101 Stat. 1330-438; Pub. L. 101-508, title XI, Sec.
11217(a), Nov. 5, 1990, 104 Stat. 1388-437; Pub. L. 105-34, title
X, Sec. 1034(a), Aug. 5, 1997, 111 Stat. 937; Pub. L. 105-206,
title VI, Sec. 6010(i), July 22, 1998, 112 Stat. 815.)
Amendment of Section
REPEAL
This subchapter, relating to the tax on communications, was
repealed by Pub. L. 90-364, title I, Sec. 105(b)(3), June 28,
1968, 82 Stat. 266, as amended by Pub. L. 91-172, title VII, Sec.
702(b)(3), Dec. 30, 1969, 83 Stat. 660; Pub. L. 91-614, title II,
Sec. 201(b)(3), Dec. 31, 1970, 84 Stat. 1843, effective with
respect to amounts paid pursuant to bills first rendered on or
after Jan. 1, 1982. In the case of communications services
rendered before Nov. 1, 1981, for which a bill has not been
rendered before Jan. 1, 1982, a bill shall be treated as having
been first rendered on Dec. 31, 1981.
Pub. L. 96-499, title XI, Sec. 1151, Dec. 5, 1980, 94 Stat.
2694; Pub. L. 97-34, title VIII, Sec. 821, Aug. 13, 1981, 95
Stat. 351; Pub. L. 97-248, title II, Sec. 282(a), Sept. 3, 1982,
96 Stat. 568; Pub. L. 98-369, div. A, title I, Sec. 26, July 18,
1984, 98 Stat. 507; Pub. L. 99-514, title XVIII, Sec. 1801(b),
Oct. 22, 1986, 100 Stat. 2785; Pub. L. 100-203, title X, Sec.
10501, Dec. 22, 1987, 101 Stat. 1330-438; Pub. L. 101-508, title
XI, Sec. 11217(a), Nov. 5, 1990, 104 Stat. 1388-437, amended
section 4251 of this title, relating to the imposition of the tax
on communications, extending the date in (and finally
eliminating) provisions which had reduced the tax to zero after a
specified date, without amending Pub. L. 90-364, title I, Sec.
105(b)(3), June 28, 1968, 82 Stat. 266, which, as amended, had
repealed this subchapter, effective with respect to amounts paid
pursuant to bills first rendered on or after Jan. 1, 1982.
Miscellaneous
AMENDMENTS
1998 - Subsec. (d)(3). Pub. L. 105-206 substituted ''any other
similar arrangement'' for ''other similar arrangement''.
1997 - Subsec. (d). Pub. L. 105-34 added subsec. (d).
1990 - Subsec. (b)(2). Pub. L. 101-508 substituted ''percent.''
for ''percent; except that, with respect to amounts paid pursuant
to bills first rendered after 1990, the applicable percentage shall
be zero.''
1987 - Subsec. (b)(2). Pub. L. 100-203 amended par. (2)
generally. Prior to amendment, par. (2) read as follows: ''The
term 'applicable percentage' means -
''With respect to amount paid pur-
suant to bills first rendered: The percentage is:
During 1983, 1984, 1985, 1986, or 1987 3
During 1988 or thereafter 0.''
1986 - Subsec. (b)(2). Pub. L. 99-514 inserted ''1985,'' after
''1984,'' in table.
1984 - Subsec. (b)(2). Pub. L. 98-369 substituted ''During 1983,
1984, 1986, or 1987'' for ''During 1983, 1984, or 1985'' in item
relating to an applicable percentage of 3 and substituted ''During
1988 or thereafter'' for ''During 1986 or thereafter'' in item
relating to an applicable percentage of 0.
1982 - Subsec. (a). Pub. L. 97-248 added subsec. (a) and struck
out former subsec. (a) which provided that there was a tax on
communication services specified as local telephone service, toll
telephone service, and teletypewriter exchange service, directed
that the tax was to be paid by the person paying for such services,
and designated the tax as the percentage of the amount paid for the
services as set out in the following table:
---------------------------------------------------------------------
''Amounts paid pursuant to bills Percent -
first rendered -
---------------------------------------------------------------------
''Before January 1, 1973 10
During 1973 9
During 1974 8
During 1975 7
During 1976 6
During 1977 5
During 1978 4
During 1979 3
During 1980 or 1981 2
During 1982, 1983, or 1984 1''
-------------------------------
Subsec. (b). Pub. L. 97-248 added subsec. (b) and struck out
former subsec. (b) which provided that the tax imposed by former
subsec. (a) would not apply to amounts paid pursuant to bills first
rendered on or after January 1, 1985.
1981 - Subsec. (a)(2). Pub. L. 97-34, Sec. 821(a), substituted
''During 1982, 1983, or 1984'' for ''During 1982'' in table.
Subsec. (b). Pub. L. 97-34, Sec. 821(b), extended termination
date to Jan. 1, 1985, from Jan. 1, 1983.
1980 - Subsec. (a)(2). Pub. L. 96-499, Sec. 1151(a), substituted
''During 1980 or 1981'' for ''During 1980'' and ''During 1982'' for
''During 1981'' in table.
Subsec. (b). Pub. L. 96-499, Sec. 1151(b), substituted ''1983''
for ''1982''.
1970 - Subsec. (a)(2). Pub. L. 91-614, Sec. 201(b)(1),
substituted provisions providing the rate of tax on amounts paid
for communication services pursuant to bills first rendered before
Jan. 1, 1973 is 10% of such amount, amounts paid pursuant to bills
first rendered during 1973 is 9% of such amount, during 1974 is 8%
of such amount, during 1975 is 7% of such amount, during 1976 is 6%
of such amount, during 1977 is 5% of such amount, during 1978 is 4%
of such amount, during 1979 is 3% of such amount, during 1980 is 2%
of such amount, and during 1981 is 1% of such amount for provisions
providing the rate of tax on amounts paid for communication
services pursuant to bills first rendered before Jan. 1, 1971 is
10% of such amount, amounts paid pursuant to bills first rendered
during 1971 is 5% of such amount, during 1972 is 3% of such amount,
and during 1973 is 1% of such amount.
Subsec. (b). Pub. L. 91-614, Sec. 201(b)(2), substituted
''January 1, 1982'' for ''January 1, 1974''.
1969 - Subsec. (a)(2). Pub. L. 91-172, Sec. 702(b)(1), increased
rate of tax on amounts paid for communication services from 5 to 10
percent during 1970, from 3 to 5 percent during 1971, from 1 to 3
percent during 1972, and imposed a 1 percent tax on amounts paid
for communication services during 1973.
Subsec. (b). Pub. L. 91-172, Sec. 702(b)(2), substituted
''January 1, 1974'' for ''January 1, 1973''.
1968 - Subsec. (a)(2). Pub. L. 90-364, Sec. 105(b)(1), extended
from April 30, 1968, through the end of 1969 the period for the
imposition of the 10 percent rate, thereby increasing the rate from
1 percent to 10 percent for the period May 1, 1968, through the end
of 1968 and from 0 percent to 10 percent for 1969, and imposed a
rate of 5 percent during 1970, a rate of 3 percent during 1971, and
a rate of 1 percent during 1972.
Pub. L. 90-285 substituted ''April 30, 1968'' and ''May 1, 1968''
for ''March 31, 1968'' and ''April 1, 1968'' respectively.
Subsec. (b). Pub. L. 90-364, Sec. 105(b)(2), substituted ''1973''
for ''1969''.
Subsec. (c). Pub. L. 90-364, Sec. 105(b)(2), extended provisions
calling for treatment of bills not rendered before the end of a
year for service rendered before November 1 of that year as having
been first rendered on December 31 of that year so as to include
years subsequent to 1968 and struck out special provision for the
application of subsec. (a) in the case of communication services
rendered before March 1, 1968, for which a bill was not rendered
before May 1, 1968.
Pub. L. 90-285 substituted ''March 1, 1968,'' for ''February 1,
1968'', ''May 1, 1968'' for ''April 1, 1968'', ''April 30, 1968''
for ''March 31, 1968'', and ''February 29, 1968'' for ''January 31,
1968''.
1966 - Subsec. (a)(2). Pub. L. 89-368, Sec. 202(a)(1), increased
to 10 percent the schedule of rates for tax imposed for the period
up to April 1, 1968, and authorized a reduction to 1 percent for
the period after March 31, 1968, and before January 1, 1969.
Subsec. (c). Pub. L. 89-368, Sec. 202(a)(2), conformed subsection
to rate reduction schedule alterations by providing that, in the
case of communications services rendered before February 1, 1968,
for which a bill has not been rendered before April 1, 1968, the
bill shall be treated as having been first rendered on March 31,
1968, and, in the case of services rendered after January 31, 1968,
and before November 1, 1968, for which a bill has not been rendered
before January 1, 1969, the bill shall be treated as having first
been rendered on December 31, 1968.
1965 - Subsec. (a). Pub. L. 89-44, Sec. 302, substituted local
telephone service, toll telephone service, and teletypewriter
exchange service, for general telephone service, toll telephone
service, telegraph service, teletypewriter exchange service, wire
mileage service, and wire and equipment service as the taxed
services and reduced the rate of tax to 3 percent during 1966, 2
percent during 1967, and 1 percent during 1968.
Subsec. (b). Pub. L. 89-44, Sec. 302, added subsec. (b). Pub. L.
89-44, Sec. 701(b)(2)(B), repealed former subsec. (b), as in effect
June 30, 1965, effective on and after July 1, 1965. Such repealed
provision had called for termination of the tax on general
telephone service as of July 1, 1965.
Subsec. (c). Pub. L. 89-44, Sec. 302, added subsec. (c).
1964 - Subsec. (b)(2). Pub. L. 88-348 substituted ''July 1,
1965'' for ''July 1, 1964'' in two places.
1963 - Subsec. (b)(2). Pub. L. 88-52 substituted ''July 1, 1964''
for ''July 1, 1963'' in two places.
1962 - Subsec. (b)(2). Pub. L. 87-508 substituted ''July 1,
1963'' for ''July 1, 1962'' in two places.
1961 - Subsec. (b)(2). Pub. L. 87-72 substituted ''July 1, 1962''
for ''July 1, 1961'' in two places.
1960 - Subsec. (b)(2). Pub. L. 86-564 substituted ''July 1,
1961'' for ''July 1, 1960'' in two places.
1959 - Pub. L. 86-75 designated former provisions as subsec. (a)
and added subsec. (b).
1958 - Pub. L. 85-859 redesignated ''local telephone service'' as
''general telephone service'', ''long distance telephone service''
as ''toll telephone service'' and ''leased wire, teletypewriter or
talking circuit special service'' as ''teletypewriter exchange
service'' and ''wire mileage service''.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1034(b) of Pub. L. 105-34 provided that: ''The amendments
made by this section (amending this section) shall apply to amounts
paid in calendar months beginning more than 60 days after the date
of the enactment of this Act (Aug. 5, 1997).''
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 effective, except as otherwise
provided, as if included in the provisions of the Tax Reform Act of
1984, Pub. L. 98-369, div. A, to which such amendment relates, see
section 1881 of Pub. L. 99-514, set out as a note under section 48
of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Section 282(b) of Pub. L. 97-248 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply with
respect to amounts paid for communications services pursuant to
bills first rendered after December 31, 1982.''
EFFECTIVE DATE OF 1968 AMENDMENTS
Amendment by Pub. L. 90-364 effective Apr. 30, 1968, see section
105(c) of Pub. L. 90-364, set out as a note under section 6412 of
this title.
Amendment by Pub. L. 90-285 effective Mar. 31, 1968, see section
1(b) of Pub. L. 90-285, set out as a note under section 6412 of
this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Section 202(c) of Pub. L. 89-368 provided that: ''The amendments
made by subsections (a) (amending this section) and (b) (amending
section 4253 of this title) shall apply to amounts paid pursuant to
bills first rendered on or after April 1, 1966, for services
rendered on or after such date. In the case of amounts paid
pursuant to bills rendered on or after such date for services which
were rendered before such date and for which no previous bill was
rendered, such amendments shall apply except with respect to such
services as were rendered more than 2 months before such date. In
the case of services rendered more than 2 months before such date,
the provisions of subchapter B of chapter 33 of the Code in effect
at the time such services were rendered, subject to the provision
of section 701(b)(2) of the Excise Tax Reduction Act of 1965 (see
Effective Date of 1965 Amendment note below), shall apply to the
amounts paid for such services.''
EFFECTIVE DATE OF 1965 AMENDMENT
Section 701(b)(2)(A) of Pub. L. 89-44 provided that: ''The
amendments made by section 302 (amending this section and sections
4252, 4253, and 4254 of this title) (relating to communication
services) shall apply to amounts paid pursuant to bills rendered on
or after January 1, 1966, for services rendered on or after such
date. In the case of amounts paid pursuant to bills rendered on or
after January 1, 1966, for services which were rendered before such
date and for which no previous bill was rendered, such amendments
shall apply except with respect to such services as were rendered
more than 2 months before such date. In the case of services
rendered more than 2 months before such date, the provisions of
subchapter B of chapter 33 of the Code in effect at the time such
services were rendered shall apply to the amounts paid for such
services.''
EFFECTIVE DATE OF 1958 AMENDMENT
Section 133(b) of Pub. L. 85-859, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(1) Subject to the provisions of paragraph (2), the amendment
made by subsection (a) (amending this section and sections 4252 to
4254 of this title) shall apply with respect to amounts paid on or
after the effective date prescribed in section (1)(c) of this Act
for services rendered on or after such date.
''(2) The amendment made by subsection (a) (amending this section
and sections 4252 to 4254 of this title) shall not apply with
respect to amounts paid pursuant to bills rendered before the
effective date prescribed in section 1(c) of this Act. In the case
of amounts paid pursuant to bills rendered on or after such date
for services for which no previous bill was rendered, such
amendments shall apply except with respect to such services as were
rendered more than 2 months before such date. In the case of
services rendered more than 2 months before such date the
provisions of subchapter B of chapter 33 of the Internal Revenue
Code of 1986 (formerly I.R.C. 1954) in effect at the time such
services were rendered shall apply to the amounts paid for such
services.''
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177) or title
XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to
any plan, such plan amendment shall not be required to be made
before the first plan year beginning on or after Jan. 1, 1989, see
section 1140 of Pub. L. 99-514, as amended, set out as a note under
section 401 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 4253, 4254, 6302, 6415 of
this title.
