Vibes - Duane Morris Update on Technology Law

Welcome to Vibes, Duane Morris' periodic update on legal developments in information technology, e-commerce and telecommunications.

Recent Developments

D.C. Appeals Court Rejects Telephone Excise Tax Arguments

On December 9, 2005, the D.C. Court of Appeals rejected the federal government's argument that the Internal Revenue Service may collect a 3% surcharge on long-distance telephone charges that vary by time but not by distance. The court unanimously agreed with the lower court's decision in National Railroad Passenger Corp. v. U.S. that the statute that imposes a tax on phone calls is only applicable to calls that vary by distance and time. The court's decision is the third such defeat on this issue. On November 2 and May 11, federal appeals courts in Cincinnati and Atlanta also rejected the federal government's arguments. This demonstrates the trend towards limiting, if not abolishing, the excise tax.