WHEREAS, the federal excise tax on communications was enacted in 1898 for the purpose of funding the Spanish-American War; and

WHEREAS, the tax was introduced as a "temporary" luxury tax; and

WHEREAS, telephone service is no longer a luxury, but rather a necessity for consumers of all income levels; and

WHEREAS, the federal excise tax is regressive, as low-income Americans pay a higher percentage of their income for telephone services than high-income Americans; and

WHEREAS, telecommunication services are the infrastructure upon which new technologies including the Internet depend, and therefore the telecommunications excise tax discourages expansion of both telephone infrastructure and new technologies; and

WHEREAS, the federal excise tax on telecommunications flows into the general fund, rather than being earmarked for a specific purpose; and

WHEREAS, both Houses of Congress passed a repeal of the federal excise tax on telecommunications in 2000, which was vetoed by President William Jefferson Clinton; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2005, that the United States Congress is respectfully requested to support a repeal of the federal excise tax on telecommunications; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, and Hawaii's congressional delegation.

Report Title:

Federal Excise Tax on Telecommunications; Requesting a Repeal