Communications Excise Tax — Form 720, IRS No. 22
The federal communications excise tax is 3% of the amount paid for local telephone service and teletypewriter exchange service. Providers collect it from customers and report it quarterly on Form 720, Part I, under IRS No. 22.
- 3% tax on local telephone & teletypewriter service
- Long-distance & bundled service tax repealed in 2006
- Quarterly filing on Form 720 with semimonthly EFTPS deposits
- Supports the regular and alternative reporting methods
What is the communications excise tax?
Under IRC §§ 4251–4254, a 3% federal excise tax applies to amounts paid for taxable communications service — today that means local telephone service and teletypewriter exchange service. The provider collects the tax from the customer at billing and remits it to the IRS on Form 720. The separate tax that once applied to long-distance and bundled service was repealed in 2006.
What is taxed
Local telephone service and teletypewriter exchange service. The 3% applies to the amount paid for the taxable service. Long-distance and bundled service are no longer subject to the tax.
Who pays and who remits
The customer pays the 3% as part of the bill; the service provider collects it and is responsible for depositing and reporting it to the IRS on Form 720, Part I.
Exemptions
Certain users and services are exempt (for example, specific government, nonprofit, and service-type exemptions). Exempt customers provide an exemption certificate to the provider.
Trust fund penalty
Because the tax is collected from customers, amounts collected but not remitted can trigger the trust fund recovery penalty — a strong reason to deposit and file on time.
Filing IRS No. 22 on Form 720
The communications tax follows the standard Form 720 Part I cadence — collect, deposit, report on Schedule A, and e-file.
Collect 3% from customers
Apply the 3% tax to amounts paid for taxable local telephone and teletypewriter service, honoring valid exemption certificates.
Deposit via EFTPS semimonthly
When net Part I liability exceeds $2,500 for the quarter, deposit by the 14th day after each semimonthly period (or follow your chosen reporting method).
Report on Form 720 quarterly
Enter the tax on the IRS No. 22 line. Schedule A captures your semimonthly liability under either the regular or alternative method.
E-file with EasyFile720
Submit the completed Form 720 — including IRS No. 22, Schedule A, and any other Part I/II items — directly to the IRS.
Choosing between deposit methods? See our deep-dive on the regular vs. alternative method — the same rules apply to communications and air transportation taxes.
Communications tax — common questions
It is a 3% federal excise tax on amounts paid for local telephone service and teletypewriter exchange service, reported on Form 720, Part I, under IRS No. 22. The provider collects the tax from the customer and remits it to the IRS.
No. The federal excise tax on long-distance and bundled service was repealed in 2006. The 3% communications tax now applies to local telephone service and teletypewriter exchange service only.
Providers of taxable local telephone or teletypewriter exchange service — they collect the 3% from customers and remit it. Like other Part I taxes, semimonthly EFTPS deposits are required when net liability exceeds $2,500 for the quarter.
Yes. Collectors of the communications tax may use the regular method (based on tax actually collected) or the alternative method (based on amounts billed, treated as collected in the first seven days of the second following semimonthly period). Both are reported on Schedule A.
Yes — certain users and services are exempt, including some government, nonprofit, and specific service exemptions. Exempt customers typically provide an exemption certificate to the provider.
Other Form 720 tax categories
Air Transportation Tax
Ticket tax, segment fee, and international departure taxes
PCORI / PCOR Fee Filing
$3.84/life for plan years ending Oct 1, 2025 – Sep 30, 2026
Remittance Transfer Tax
NEW 2026 — 1% on certain transfers (IRS No. 155)
Fuel Excise Tax Filing
Diesel, gasoline, kerosene, aviation fuel, and alternative fuels