Nearly a year ago, I wrote an article titled "You're Still Paying for the Spanish-American War," in which I noted that, bizarre though it may be, we've all been socked on each phone bill by an excise tax that went into effect long ago to pay for the Spanish-American War. I explained:

[A USA Today article] made me dig out my last phone bill from Verizon (NYSE:VZ). There it was -- "Federal Excise Tax." You'll probably find it listed on your bill, too. If your monthly bill amounts to around $100, at the current 3% rate for the tax (which has been as high as 25% in past years), you'll be paying $3 per month for this tax, or $36 per year. Heavy phone users might pay $100 or more per year. And all this, to pay for the Spanish-American War?

Fortunately, once this tax started getting more press, no one could really defend it.

Even folks at AT&T (NYSE:T) don't like this tax. Jim Cicconi, AT&T's general counsel, has said, "This is a 19th-century tax on a 21st-century technology. It makes no sense, and it ought to be repealed."

Well, sometimes our friends in Washington do something right. The tax has indeed finally come to an end, and we're even being offered refunds!

How to grab your money
The money is out there for you -- you just have to jump through a few hoops in order to get it. Here are a few things to know, courtesy of Dick Hansen at refundphonetax.com, and also from the IRS:

  • You are to claim the refund on the 2006 tax form that you file in 2007.
  • You can opt for a standard refund of $30 (if you have one exemption), $40 (if you have two), $50 (if you have three), or $60 (if you have more). This option requires no documentation from you.
  • If you have (or want to go through the trouble of procuring) your telephone bill statements from March 2003 to July 2006, you can get a refund based on amounts you were actually charged. In most cases, this can amount to a lot more than the standard refund -- perhaps as much as $100 to $300 for many of us. You'll need to fill out IRS Form 8913 for this. When I looked for it at the IRS website recently, it didn't seem to be available yet. So keep checking.
  • Refunds are also available for businesses.

Learn more about how to get the money due to you at the IRS's own question-and-answer page. And in the meantime, here's hoping we don't end up going to war against Spain again!

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AT&T is a former Stock Advisor recommendation.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. The Motley Fool has a full disclosure policy.