§ 4254. Computation of tax

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1954

   Aug. 16, 1954, ch. 736, 68A Stat. 504 · 68A Stat. 504

   Enacted · 26 U.S.C. § 4254

   Aug. 16, 1954, ch. 736, 68A Stat. 504

   Source evidence

   Code source credit
   Aug. 16, 1954, ch. 736, 68A Stat. 504

2. 1958

   Pub. L. 85–859 title I § 133(a) · 72 Stat. 1275

   Changed · 26 U.S.C. § 4254(a)

   Pub. L. 85–859 provided that if the person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then the amount on which the tax with respect to each group shall be based shall be the sum of all items within that group, and the tax on remaining items not included in any such group shall be based on the charge of each item separately

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 85–859 provided that if the person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then the amount on which the tax with respect to each group shall be based shall be the sum of all items within that group, and the tax on remaining items not included in any such group shall be based on the charge of each item separately.

   Enacted provision · exact public law section
   (a) In General.— Subchapter B of chapter 33 (communications 26 USC 4251–4254. taxes) is amended to read as follows: “Subchapter B— Communications “Sec. 4251. Imposition of tax. “Sec. 4252. Definitions. “Sec. 4253. Exemptions. “Sec. 4254. Computation of tax. “SEC. 4251. IMPOSITION OF TAX. “There is hereby imposed on amounts paid for the communication services enumerated in the following table a tax equal to the percent of the amount so paid as is specified in such table: “Taxable service Rate of tax     Percent General telephone service 10 Toll telephone service 10 Telegraph service 10 Teletypewriter exchange service 10 Wire mileage service 10 Wire and equipment service service 8   The taxes imposed by this section shall be paid by the person paying for the services. “SEC. 4252. DEFINITIONS. “(a) General Telephone Service.— For purposes of this subchapter, the term ‘general telephone service’ means any telephone or radio telephone service furnished in connection with any fixed or mobile telephone or radio telephone station which may be connected (directly or indirectly) to an exchange operated by a person engaged in the business of furnishing communication service, if by means of such connection communication may be established with any other fixed or mobile telephone or radio telephone station. Without limiting the preceding sentence, any service described therein shall be treated as including the use of— “(1) any private branch exchange (and any fixed or mobile telephone or radio telephone station connected, directly or indirectly, with such an exchange), and “(2) any tie line or extension line. The term ‘general telephone service’ does not include any service which is toll telephone service or wire and equipment service. “(b) Toll Telephone Service.— For purposes of this subchapter, the term ‘toll telephone service’ means a telephone or radio telephone message or conversation for which (1) there is a toll charge, and (2) the charge is paid within the United States. “(c) Telegraph Service.— For purposes of this subchapter, the term ‘telegraph service’ means a telegram, cable, or radio dispatch or message for which the charge is paid within the United States. “(d) Teletypewriter Exchange Service.— For purposes of this subchapter, the term ‘teletypewriter exchange service’ means any service where a teletypewriter (or similar device) may be connected (directly or indirectly) to an exchange operated by a person engaged in the business of furnishing communication service, if by means of such connection communication may be established with any other teletype-writer (or similar device). “(e) Wire Mileage Service.— For purposes of this subchapter, the term ‘wire mileage service’ means— “(1) any telephone or radio telephone service, and “(2) any other wire or radio circuit service, not included in any other subsection of this section; except that such term does not include service used exclusively in furnishing wire and equipment service. “(f) Wire and Equipment Service.— For purposes of this subchapter, the term ‘wire and equipment service’ includes stock quotation and information services, burglar alarm or fire alarm service, and all other similar services (whether or not oral transmission is involved). Such term does not include teletypewriter exchange service. “SEC. 4253. EXEMPTIONS. “(a) Certain Coin-Operated Service.— Services paid for by inserting coins in coin-operated telephones available to the public shall not be subject to the tax imposed by section 4251 with respect to general telephone service, or with respect to toll telephone service or telegraph service if the charge for such toll telephone service or telegraph service is less than 25 cents; except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be subject to the tax. “(b) News Services.— No tax shall be imposed under section 4251, except with respect to general telephone service, on any payment received from any person for services used in the collection of news for the public press, or a news ticker service furnishing a general news service similar to that of the public press, or radio broadcasting, or in the dissemination of news through the public press, or a news ticker service furnishing a general news service similar to that of the public press, or by means of radio broadcasting, if the charge for such services is billed in writing to such person. “(c) Certain Organizations.— No tax shall be imposed under section 4251 on any payment received for services furnished to an international organization, or to the American National Red Cross. “(d) Servicemen in Combat Zone.— No tax shall be imposed under section 4251 on any payment received for any toll telephone service which originates within a combat zone, as defined in section 112, from 26 USC 112. a member of the Armed Forces of the United States performing service in such combat zone, as determined under such section, provided a certificate, setting forth such facts as the Secretary or his delegate may by regulations prescribe, is furnished to the person receiving such payment. “(e) For Items Otherwise Taxed.— Only one payment of tax under section 4251 shall be required with respect to the tax on toll telephone service, telegraph service, or teletypewriter exchange service, notwithstanding the lines or stations of one or more persons are used in furnishing such service. “(f) Special Wire Service in Company Business.— No tax shall be imposed under section 4251 on the amount paid for so much of any wire mileage service or wire and equipment service as is used in the conduct, by a common carrier or a telephone or telegraph company or radio broadcasting station or network, of its business as such. “(g) Installation Charges.— No tax shall be imposed under section 4251 on so much of any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to such installation. “(h) Terminal Facilities in Case of Wire Mileage Service.— No tax shall be imposed under section 4251 on so much of any amount paid for wire mileage service as is paid for, and properly attributable to, the use of any sending or receiving set or device which is station terminal equipment. “(i) Certain Interior Communication Systems.— No tax shall be imposed under section 4251 on any amount paid for wire mileage service or wire and equipment service, if such service is rendered through the use of an interior communication system. For purposes of the preceding sentence, the term ‘interior communication system’ means any system— “(1) no part of which is situated off the premises of the subscriber, and which may not be connected (directly or indirectly) with any communication system any part of which is situated off the premises of the subscriber, or “(2) which is situated exclusively in a vehicle of the subscriber. “SEC. 4254. COMPUTATION OF TAX. “(a) General Rule.— If a bill is rendered the taxpayer for general telephone service, toll telephone service, or telegraph service— “(1) the amount on which the tax with respect to such services shall be based shall be the sum of all charges for such services included in the bill; except that “(2) if the person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then (A) the amount on which the tax with respect to each such group shall be based shall be the sum of all items within that group, and (B) the tax on the remaining items not included in any such group shall be based on the charge for each item separately. “(b) Where Payment Is Made for Toll. Telephone Service or Telegraph Service in Coin-Operated Telephones.— If the tax imposed by section 4251 with respect to toll telephone service or telegraph service is paid by inserting coins in coin-operated telephones, tax shall be computed to the nearest multiple of 5 cents, except that where the tax is midway between multiples of 5 cents, the next higher multiple shall apply.”

3. 1958

   Pub. L. 85–859 title I § 133(a) · 72 Stat. 1275

   Substituted · 26 U.S.C. § 4254(b)

   Pub. L. 85–859 substituted “toll telephone service” for “long distance telephone service”

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 85–859 substituted “toll telephone service” for “long distance telephone service”.

   Enacted provision · exact public law section
   (a) In General.— Subchapter B of chapter 33 (communications 26 USC 4251–4254. taxes) is amended to read as follows: “Subchapter B— Communications “Sec. 4251. Imposition of tax. “Sec. 4252. Definitions. “Sec. 4253. Exemptions. “Sec. 4254. Computation of tax. “SEC. 4251. IMPOSITION OF TAX. “There is hereby imposed on amounts paid for the communication services enumerated in the following table a tax equal to the percent of the amount so paid as is specified in such table: “Taxable service Rate of tax     Percent General telephone service 10 Toll telephone service 10 Telegraph service 10 Teletypewriter exchange service 10 Wire mileage service 10 Wire and equipment service service 8   The taxes imposed by this section shall be paid by the person paying for the services. “SEC. 4252. DEFINITIONS. “(a) General Telephone Service.— For purposes of this subchapter, the term ‘general telephone service’ means any telephone or radio telephone service furnished in connection with any fixed or mobile telephone or radio telephone station which may be connected (directly or indirectly) to an exchange operated by a person engaged in the business of furnishing communication service, if by means of such connection communication may be established with any other fixed or mobile telephone or radio telephone station. Without limiting the preceding sentence, any service described therein shall be treated as including the use of— “(1) any private branch exchange (and any fixed or mobile telephone or radio telephone station connected, directly or indirectly, with such an exchange), and “(2) any tie line or extension line. The term ‘general telephone service’ does not include any service which is toll telephone service or wire and equipment service. “(b) Toll Telephone Service.— For purposes of this subchapter, the term ‘toll telephone service’ means a telephone or radio telephone message or conversation for which (1) there is a toll charge, and (2) the charge is paid within the United States. “(c) Telegraph Service.— For purposes of this subchapter, the term ‘telegraph service’ means a telegram, cable, or radio dispatch or message for which the charge is paid within the United States. “(d) Teletypewriter Exchange Service.— For purposes of this subchapter, the term ‘teletypewriter exchange service’ means any service where a teletypewriter (or similar device) may be connected (directly or indirectly) to an exchange operated by a person engaged in the business of furnishing communication service, if by means of such connection communication may be established with any other teletype-writer (or similar device). “(e) Wire Mileage Service.— For purposes of this subchapter, the term ‘wire mileage service’ means— “(1) any telephone or radio telephone service, and “(2) any other wire or radio circuit service, not included in any other subsection of this section; except that such term does not include service used exclusively in furnishing wire and equipment service. “(f) Wire and Equipment Service.— For purposes of this subchapter, the term ‘wire and equipment service’ includes stock quotation and information services, burglar alarm or fire alarm service, and all other similar services (whether or not oral transmission is involved). Such term does not include teletypewriter exchange service. “SEC. 4253. EXEMPTIONS. “(a) Certain Coin-Operated Service.— Services paid for by inserting coins in coin-operated telephones available to the public shall not be subject to the tax imposed by section 4251 with respect to general telephone service, or with respect to toll telephone service or telegraph service if the charge for such toll telephone service or telegraph service is less than 25 cents; except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be subject to the tax. “(b) News Services.— No tax shall be imposed under section 4251, except with respect to general telephone service, on any payment received from any person for services used in the collection of news for the public press, or a news ticker service furnishing a general news service similar to that of the public press, or radio broadcasting, or in the dissemination of news through the public press, or a news ticker service furnishing a general news service similar to that of the public press, or by means of radio broadcasting, if the charge for such services is billed in writing to such person. “(c) Certain Organizations.— No tax shall be imposed under section 4251 on any payment received for services furnished to an international organization, or to the American National Red Cross. “(d) Servicemen in Combat Zone.— No tax shall be imposed under section 4251 on any payment received for any toll telephone service which originates within a combat zone, as defined in section 112, from 26 USC 112. a member of the Armed Forces of the United States performing service in such combat zone, as determined under such section, provided a certificate, setting forth such facts as the Secretary or his delegate may by regulations prescribe, is furnished to the person receiving such payment. “(e) For Items Otherwise Taxed.— Only one payment of tax under section 4251 shall be required with respect to the tax on toll telephone service, telegraph service, or teletypewriter exchange service, notwithstanding the lines or stations of one or more persons are used in furnishing such service. “(f) Special Wire Service in Company Business.— No tax shall be imposed under section 4251 on the amount paid for so much of any wire mileage service or wire and equipment service as is used in the conduct, by a common carrier or a telephone or telegraph company or radio broadcasting station or network, of its business as such. “(g) Installation Charges.— No tax shall be imposed under section 4251 on so much of any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to such installation. “(h) Terminal Facilities in Case of Wire Mileage Service.— No tax shall be imposed under section 4251 on so much of any amount paid for wire mileage service as is paid for, and properly attributable to, the use of any sending or receiving set or device which is station terminal equipment. “(i) Certain Interior Communication Systems.— No tax shall be imposed under section 4251 on any amount paid for wire mileage service or wire and equipment service, if such service is rendered through the use of an interior communication system. For purposes of the preceding sentence, the term ‘interior communication system’ means any system— “(1) no part of which is situated off the premises of the subscriber, and which may not be connected (directly or indirectly) with any communication system any part of which is situated off the premises of the subscriber, or “(2) which is situated exclusively in a vehicle of the subscriber. “SEC. 4254. COMPUTATION OF TAX. “(a) General Rule.— If a bill is rendered the taxpayer for general telephone service, toll telephone service, or telegraph service— “(1) the amount on which the tax with respect to such services shall be based shall be the sum of all charges for such services included in the bill; except that “(2) if the person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then (A) the amount on which the tax with respect to each such group shall be based shall be the sum of all items within that group, and (B) the tax on the remaining items not included in any such group shall be based on the charge for each item separately. “(b) Where Payment Is Made for Toll. Telephone Service or Telegraph Service in Coin-Operated Telephones.— If the tax imposed by section 4251 with respect to toll telephone service or telegraph service is paid by inserting coins in coin-operated telephones, tax shall be computed to the nearest multiple of 5 cents, except that where the tax is midway between multiples of 5 cents, the next higher multiple shall apply.”

4. 1965

   Excise Tax Reduction Act of 1965

   Pub. L. 89–44 title III § 302 · 79 Stat. 136

   Substituted · 26 U.S.C. § 4254(a)

   Pub. L. 89–44 substituted “local telephone service or toll telephone service” for “general telephone service, toll telephone service, or telegraph service”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 89–44 substituted “local telephone service or toll telephone service” for “general telephone service, toll telephone service, or telegraph service”.

   Enacted provision · exact public law section
   SEC. 302. COMMUNICATIONS TAX. Subchapter B of chapter 33 (relating to communications taxes) is 72 Stat. 1289. amended to read as follows: “Subchapter B— Communications “Sec. 4251. Imposition of tax. “Sec. 4252. Definitions. “Sec. 4253. Exemptions. “Sec. 4254. Computation of tax. “SEC. 4251. IMPOSITION OF TAX. “(a) In General.— “(1) Except as provided in subsection (b), there is hereby imposed on amounts paid for the following communication services a tax equal to the percent of the amount so paid specified in paragraph (2): “Local telephone service. “Toll telephone service. “Teletypewriter exchange service. “The taxes imposed by this section shall be paid by the person paying for the services. “(2) The rate of tax referred to in paragraph (1) is as follows: “Amounts paid pursuant to bills first rendered— Percent— “During 1966 3 “During 1967 2 “During 1968 1 “(b) Termination of Tax.— The tax imposed by subsection (a) shall not apply to amounts paid pursuant to wills first rendered on or after January 1, 1969. “(c) Special Rule.— For purposes of subsections (a) and (b). in the case of communication services rendered before November 1 of any 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 during such year. “SEC. 4252. DEFINITIONS. “(a) Local Telephone Service.— For purposes of this subchapter, the term ‘local telephone service’ means— “(1) the access to a local telephone system, and the privilege of telephonic quality communication with substantially all persons having telephone or radio telephone stations constituting a part of such local telephone system, and “(2) any facility or service provided in connection with a service described in paragraph (1). The term ‘local telephone service’ does not include any service which is a ‘toll telephone service’ or a ‘private communication service’ as defined in subsections (b) and (d). “(b) Toll Telephone Service.— For purposes of this subchapter, the term ‘toll telephone service’ means— “(1) a telephonic quality communication for which (A) there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication and (B) the charge is paid within the United States, and “(2) a service which entitles the subscriber, upon payment of a periodic charge (determined as a flat amount or upon the basis of total elapsed transmission time), to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with this service is located. “(c) Teletypewriter Exchange Service.— For purposes of this subchapter, the term ‘teletypewriter exchange service’ means the access from a teletypewriter or other data station to the teletypewriter exchange system of which such station is a part, and the privilege of intercommunication by such station with substantially all persons having teletypewriter or other data stations constituting a part of the same teletypewriter exchange system, to which the subscriber is entitled upon payment of a charge or charges (whether such charge or charges are determined as a flat periodic amount, on the basis or distance and elapsed transmission time, or in some other manner). The term ‘teletypewriter exchange service’ does not include any service which is ‘local telephone service’ as defined in subsection (a). “(d) Private Communication Service.— For purposes of this subchapter, the term ‘private communication service’ means— “(1) the communication service furnished to a subscriber which entitles the subscriber— “(A) to exclusive or priority use of any communication channel or groups of channels, or “(B) to the use of an intercommunication system for the subscriber’s stations, regardless of whether such channel, groups of channels, or intercommunication system may be connected through switching with a service described in subsection (a), (b),or (c), “(2) switching capacity, extension lines and stations, or other associated services which are provided in connection with, and are necessary or unique to the use of, channels or systems described in paragraph (1), and “(3) the channel mileage which connects a telephone station located outside a local telephone system area with a central office in such local telephone system, except that such term does not include any communication service unless a separate charge is made for such service. “SEC. 4253. EXEMPTIONS. “(a) Certain Coin-Operated Service.— Service paid for by inserting coins in coin-operated telephones available to the public shall not be subject to the tax imposed by section 4251 with respect to local telephone service, or with respect to toll telephone service if the charge for such toll telephone service is less than 25 cents; except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be subject to the tax. “(b) News Services.— No tax shall be imposed under section 4251, except with respect to local telephone service, on any payment received from any person for services used in the collection of news for the public press, or a news ticker service furnishing a general news service similar to that of the public press, or radio broadcasting, or in the dissemination of news through the public press, or a news ticker service furnishing a general news service similar to that of the public press, or by means of radio broadcasting, if the charge for such service is billed in writing to such person. “(c) International, etc., Organizations.— No tax shall be imposed under section 4251 on any payment received for services furnished to an international organization, or to the American National Red Cross. “(d) Servicemen in Combat Zone.— No tax shall be imposed under section 4251 on any payment received for any toll telephone service which originates within a combat zone, as defined in section 112, 68A Stat. 34. from a member of the Armed Forces of the United States performing service in such combat zone, as determined under such section, provided a certificate, setting forth such facts as the Secretary or his delegate may by regulations prescribe, is furnished to the person receiving such payment. “(e) Items Otherwise Taxed.— Only one payment of tax under section 4251 shall be required with respect to the tax on any service, notwithstanding the lines or stations of one or more persons are used in furnishing such service. “(f) Common Carriers and Communications Companies.— No tax shall be imposed under section 4251 on the amount paid for any toll telephone service described in section 4252(b)(2) to the extent that the amount so paid is for use by a common carrier, telephone or telegraph company, or radio broadcasting station or network in the conduct of its business as such. “(g) Installation Charges.— No tax shall be imposed under section 4251 on so much of any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to such installation. “SEC. 4254. COMPUTATION OF TAX. “(a) General Rule.— If a bill is rendered the taxpayer for local telephone service or toll telephone service— “(1) the amount on which the tax with respect to such services shall be based shall be the sum of all charges for such services included in the bill; except that “(2) if the person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then (A) the amount on which the tax with respect to each such group shall be based shall be the sum of all items within that group, and (B) the tax on the remaining items not included in any such group shall be based on the charge for each item separately. “(b) Where Payment Is Made for Toll Telephone Service in Coin-Operated Telephones.— If the tax imposed by section 4251 with respect to toll telephone service is paid by inserting coins in coin-operated telephones, tux shall be computed to the nearest multiple of 5 cents, except that, where the tax is midway between multiples of 5 cents, the next higher multiple shall apply.”

5. 1965

   Excise Tax Reduction Act of 1965

   Pub. L. 89–44 title III § 302 · 79 Stat. 136

   Substituted · 26 U.S.C. § 4254(b)

   Pub. L. 89–44 substituted “toll telephone service” for “toll telephone service or telegraph service” in catchline and text

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 89–44 substituted “toll telephone service” for “toll telephone service or telegraph service” in catchline and text.

   Enacted provision · exact public law section
   SEC. 302. COMMUNICATIONS TAX. Subchapter B of chapter 33 (relating to communications taxes) is 72 Stat. 1289. amended to read as follows: “Subchapter B— Communications “Sec. 4251. Imposition of tax. “Sec. 4252. Definitions. “Sec. 4253. Exemptions. “Sec. 4254. Computation of tax. “SEC. 4251. IMPOSITION OF TAX. “(a) In General.— “(1) Except as provided in subsection (b), there is hereby imposed on amounts paid for the following communication services a tax equal to the percent of the amount so paid specified in paragraph (2): “Local telephone service. “Toll telephone service. “Teletypewriter exchange service. “The taxes imposed by this section shall be paid by the person paying for the services. “(2) The rate of tax referred to in paragraph (1) is as follows: “Amounts paid pursuant to bills first rendered— Percent— “During 1966 3 “During 1967 2 “During 1968 1 “(b) Termination of Tax.— The tax imposed by subsection (a) shall not apply to amounts paid pursuant to wills first rendered on or after January 1, 1969. “(c) Special Rule.— For purposes of subsections (a) and (b). in the case of communication services rendered before November 1 of any 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 during such year. “SEC. 4252. DEFINITIONS. “(a) Local Telephone Service.— For purposes of this subchapter, the term ‘local telephone service’ means— “(1) the access to a local telephone system, and the privilege of telephonic quality communication with substantially all persons having telephone or radio telephone stations constituting a part of such local telephone system, and “(2) any facility or service provided in connection with a service described in paragraph (1). The term ‘local telephone service’ does not include any service which is a ‘toll telephone service’ or a ‘private communication service’ as defined in subsections (b) and (d). “(b) Toll Telephone Service.— For purposes of this subchapter, the term ‘toll telephone service’ means— “(1) a telephonic quality communication for which (A) there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication and (B) the charge is paid within the United States, and “(2) a service which entitles the subscriber, upon payment of a periodic charge (determined as a flat amount or upon the basis of total elapsed transmission time), to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with this service is located. “(c) Teletypewriter Exchange Service.— For purposes of this subchapter, the term ‘teletypewriter exchange service’ means the access from a teletypewriter or other data station to the teletypewriter exchange system of which such station is a part, and the privilege of intercommunication by such station with substantially all persons having teletypewriter or other data stations constituting a part of the same teletypewriter exchange system, to which the subscriber is entitled upon payment of a charge or charges (whether such charge or charges are determined as a flat periodic amount, on the basis or distance and elapsed transmission time, or in some other manner). The term ‘teletypewriter exchange service’ does not include any service which is ‘local telephone service’ as defined in subsection (a). “(d) Private Communication Service.— For purposes of this subchapter, the term ‘private communication service’ means— “(1) the communication service furnished to a subscriber which entitles the subscriber— “(A) to exclusive or priority use of any communication channel or groups of channels, or “(B) to the use of an intercommunication system for the subscriber’s stations, regardless of whether such channel, groups of channels, or intercommunication system may be connected through switching with a service described in subsection (a), (b),or (c), “(2) switching capacity, extension lines and stations, or other associated services which are provided in connection with, and are necessary or unique to the use of, channels or systems described in paragraph (1), and “(3) the channel mileage which connects a telephone station located outside a local telephone system area with a central office in such local telephone system, except that such term does not include any communication service unless a separate charge is made for such service. “SEC. 4253. EXEMPTIONS. “(a) Certain Coin-Operated Service.— Service paid for by inserting coins in coin-operated telephones available to the public shall not be subject to the tax imposed by section 4251 with respect to local telephone service, or with respect to toll telephone service if the charge for such toll telephone service is less than 25 cents; except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be subject to the tax. “(b) News Services.— No tax shall be imposed under section 4251, except with respect to local telephone service, on any payment received from any person for services used in the collection of news for the public press, or a news ticker service furnishing a general news service similar to that of the public press, or radio broadcasting, or in the dissemination of news through the public press, or a news ticker service furnishing a general news service similar to that of the public press, or by means of radio broadcasting, if the charge for such service is billed in writing to such person. “(c) International, etc., Organizations.— No tax shall be imposed under section 4251 on any payment received for services furnished to an international organization, or to the American National Red Cross. “(d) Servicemen in Combat Zone.— No tax shall be imposed under section 4251 on any payment received for any toll telephone service which originates within a combat zone, as defined in section 112, 68A Stat. 34. from a member of the Armed Forces of the United States performing service in such combat zone, as determined under such section, provided a certificate, setting forth such facts as the Secretary or his delegate may by regulations prescribe, is furnished to the person receiving such payment. “(e) Items Otherwise Taxed.— Only one payment of tax under section 4251 shall be required with respect to the tax on any service, notwithstanding the lines or stations of one or more persons are used in furnishing such service. “(f) Common Carriers and Communications Companies.— No tax shall be imposed under section 4251 on the amount paid for any toll telephone service described in section 4252(b)(2) to the extent that the amount so paid is for use by a common carrier, telephone or telegraph company, or radio broadcasting station or network in the conduct of its business as such. “(g) Installation Charges.— No tax shall be imposed under section 4251 on so much of any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to such installation. “SEC. 4254. COMPUTATION OF TAX. “(a) General Rule.— If a bill is rendered the taxpayer for local telephone service or toll telephone service— “(1) the amount on which the tax with respect to such services shall be based shall be the sum of all charges for such services included in the bill; except that “(2) if the person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then (A) the amount on which the tax with respect to each such group shall be based shall be the sum of all items within that group, and (B) the tax on the remaining items not included in any such group shall be based on the charge for each item separately. “(b) Where Payment Is Made for Toll Telephone Service in Coin-Operated Telephones.— If the tax imposed by section 4251 with respect to toll telephone service is paid by inserting coins in coin-operated telephones, tux shall be computed to the nearest multiple of 5 cents, except that, where the tax is midway between multiples of 5 cents, the next higher multiple shall apply.”

6. 1977

   Pub. L. 95–172 § 2(a) · 91 Stat. 1358

   Added · 26 U.S.C. § 4254(c)

   Pub. L. 95–172 added subsec. (c)

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 95–172 added subsec. (c).

   Enacted provision · exact public law section
   (2) with respect to which there would have been no duty if the amendment made by subsection (a) applied to such entry or withdrawal,

   Effective date note
   Pub. L. 95–172, § 2(b), Nov. 12, 1977, 91 Stat. 1358, provided that: “The amendment made by this section [amending this section] shall take effect only with respect to amounts paid pursuant to bills first rendered on or after the first day of the first month which begins more than 20 days after the date of the enactment of this Act [Nov. 12, 1977]. For purposes of the preceding sentence, in the case of communications services rendered more than 2 months before the effective date provided in the preceding sentence, no bill shall be treated as having been first rendered on or after such effective date.”

5 of 6 references resolved to an enrolled provision · 1 partial