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26 U.S.C. § 4254 — Computation of tax
Federal law — U.S. Code and appendices · legal_authorities
**(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, 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.
**(c) Certain State and local taxes not included** For purposes of this subchapter, in determining the amounts paid for communications services, there shall not be included the amount of any State or local tax imposed on the furnishing or sale of such services, if the amount of such tax is separately stated in the bill.
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Source file: Laws/federal/codes/united-states-code/title-26/section-4254-computation-of-tax--34b8ecaaa7.md
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Source location: Title 26, Chapter 33, § 4254; chapter-033-facilities-and-services.md
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**(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, 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.
**(c) Certain State and local taxes not included** For purposes of this subchapter, in determining the amounts paid for communications services, there shall not be included the amount of any State or local tax imposed on the furnishing or sale of such services, if the amount of such tax is separately stated in the bill.
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Federal law — U.S. Code and appendices · legal_authorities
**(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
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4251
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Federal law — U.S. Code and appendices · legal_authorities
Page 2950
TITLE 26—INTERNAL REVENUE CODE
§ 4254
facilities furnished to an international organization, or
any organization created by act of Congress to act in
matters of relief under the treaty of Geneva of August
22, 1864’’.
Subsec. (d). Pub. L. 85–859 substituted ‘‘on any pay-
ment received for any toll telephone service’’ for ‘‘with
respect to long distance telephone service upon any
payment received for any telephone or radio telephone
message’’.
Subsec. (e). Pub. L. 85–859 substituted ‘‘toll telephone
service, telegraph service, or teletypewriter exchange
service’’ for ‘‘long distance telephone service or tele-
graph service’’ and ‘‘in furnishing such service’’ for ‘‘in
the transmission of such dispatch, message or con-
versation’’.
Subsec. (f). Pub. L. 85–859 substituted ‘‘any wire mile-
age service or wire and equipment service as is used in
the conduct’’ for ‘‘the service described in sections
4252(d) and (e) as is utilized in the conduct’’.
Subsecs. (g) to (i). Pub. L. 85–859 added subsecs. (g) to
(i).
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 2006 AMENDMENT
Amendment by Pub. L. 109–280 effective Jan. 1, 2007,
see section 1207(g)(1) of Pub. L. 109–280, set out as a note
under section 4041 of this title.
EFFECTIVE DATE OF 1990 AMENDMENT
Pub. L. 101–508, title XI, § 11217(c)(2), Nov. 5, 1990, 104
Stat. 1388–438, provided that:
‘‘(A) IN
GENERAL.—The amendment made by para-
graph (1) [amending this section] shall apply to any
claim for exemption made after the date of the enact-
ment of this Act [Nov. 5, 1990].
‘‘(B) DURATION
OF
EXISTING
CERTIFICATES.—Any an-
nual certificate of exemption effective on the date of
the enactment of this Act [Nov. 5, 1990] shall remain ef-
fective until the end of the annual period.’’
EFFEC
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 4254
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