Retailers and other businesses that sell prepaid phone cards for long-distance service can usually qualify for the telephone tax refund, according to the Internal Revenue Service.
In most cases, it is the phone card retailer, and not the phone company that issues the card or the customer who actually uses the card, that is responsible for paying the 3-percent federal excise tax. As long as the phone card was not restricted to local-only service, the retailer is eligible to request the telephone tax refund.
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