The House Ways and Means Committee has approved a bill to disconnect the 1898 federal phone tax.

The committee, which has jurisdiction over tax and other revenue matters, approved HR 3916, the Phone Tax Repeal Act, to phase out the 3 percent phone excise tax which was first imposed over a century ago.

“This tax was passed as a temporary luxury tax on telephones in 1898 to fund the Spanish American War and proves the saying in Washington, D.C., that old taxes never die,” Fayette's Rep. Mac Collins said after voting for the repeal. “The Spanish American War was paid for a long time ago, and I think 102 years is long enough for a temporary revenue raiser. It is time to end it.”

The tax applies to all telecommunications services. If the bill is passed by the House and Senate and is then signed into law by the president, it will save Americans $232 million in 2000. The Joint Committee on Taxation estimates that it will save Americans $1.4 billion in 2001, $3 billion in 2002, and $4.7 billion in 2003.