Taxes assessed by the United States government on telecommunications services. It was created in 1898 as a luxury tax to pay for the Spanish-American War. It was not applied to telephone bills until 1971. Today, all proceeds go into the general revenue fund.
The percentage has decreased on a steady basis from its original 10% in 1971 to its current level of 3%. The Federal Excise Tax was set to expire in 1982; however, government action that year made it a permanent tax.