# 26 U.S.C. § 4254: Computation of tax

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s4254>. Cite pinpoints as 26 U.S.C. § 4254(a)(1).

## § 4254(a) General rule

If a bill is rendered the taxpayer for local telephone service or toll telephone service—

**§ 4254(a)(1)** the amount on which the tax with respect to such services shall be based shall be the sum of all charges for such services included in the bill; except that

**§ 4254(a)(2)** if the person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then (A) the amount on which the tax with respect to each such group shall be based shall be the sum of all items within that group, and (B) the tax on the remaining items not included in any such group shall be based on the charge for each item separately.

## § 4254(b) Where payment is made for toll telephone service in coin-operated telephones

If the tax imposed by section 4251 with respect to toll telephone service is paid by inserting coins in coin-operated telephones, tax shall be computed to the nearest multiple of 5 cents, except that, where the tax is midway between multiples of 5 cents, the next higher multiple shall apply.

## § 4254(c) Certain State and local taxes not included

For purposes of this subchapter, in determining the amounts paid for communications services, there shall not be included the amount of any State or local tax imposed on the furnishing or sale of such services, if the amount of such tax is separately stated in the bill.

## Regulations

- [Treas. Reg. § 49.4254-1](/26/reg/49.4254-1.md): Computation of tax. (interprets § 4254)
- [Treas. Reg. § 49.4254-2](/26/reg/49.4254-2.md): Payment for toll telephone service or telegraph service in coin-operated telephones. (interprets § 4254)

## Leading cases

- [In re WorldCom, Inc., 723 F.3d 346 (2d Cir. 2013)](https://www.courtlistener.com/opinion/1034531/internal-revenue-service-v-worldcom-inc-in-re-worldcom-inc/)

## Connections

Cites: § 4251 Imposition of tax

Cited by: none

Derived from: 1939 § 3465

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 504
- 1958-09-02: [Pub. L. 85-859](/26/act/85-859.md), 72 Stat. 1291
- 1965-06-21: [Pub. L. 89-44](/26/act/89-44.md), 79 Stat. 147
- 1977-11-12: [Pub. L. 95-172](/26/act/95-172.md), 91 Stat. 1358