This article addresses whether there is any continuing justification for applying state utility gross receipts taxes to interexchange telecommunications carriers. First, the article explores the historical basis for imposing special taxes on utilities, including telecommunications companies, and observes that such levies were designed as a quid pro quo for the special rights and privileges the state granted to utilities. Next, it traces the evolution of the telecommunications industry and demonstrates that the historical rationale for imposing gross receipts taxes on the telecommunications industry no longer applies to the competitive segment of the industry in which interexchange carriers operate. The article points out that generally accepted criteria of sound tax policy militate against the imposition of a special gross receipts tax on interexchange carriers. Finally, the article notes that other studies support its conclusion that there is no longer any justification for imposing utility gross receipts taxes on interexchange carriers. The article concludes by recommending that states reconsider their telecommunications tax policies in light of these conclusions.