Federal Telephone Excise Tax

DEFINITION of 'Federal Telephone Excise Tax '

The federal telephone excise tax is a statutory federal tax on communications services. It is collected from a customer (of a telephone company, for instance) by the entity receiving any payment for facilities or services on which the tax is imposed.

BREAKING DOWN 'Federal Telephone Excise Tax '

An excise tax is a tax on the consumption of certain goods and services, often imposed on the quantity purchased rather that the dollar value. Other common excise taxes include gasoline and cigarette taxes. The federal telephone excise tax appears as part of a monthly telephone bill or wireless plan.