COMMUNICATION SERVICES.

SEC. 202. COMMUNICATION SERVICES. (a) Postponement of Kate Reductions.—Section 4251 (relating to tax on communications) is amended— (1) By striking out subsection (a)(2) and inserting in lieu thereof: “(2) The rate of tax referred to in paragraph (1) is as follows: “Amounts paid pursuant to bills first rendered— Percent— “Before April 1, 1968 10 “After March 31, 1968, and before January 1, 1969 1” (2) By striking out subsection (c) and inserting in lieu thereof: “(c) Special Rule.— For purposes of subsection (a), in the case of communications services rendered before February 1, 1968, for which a bill has not been rendered before April 1, 1968, a bill shall be treated as having been first rendered on March 31, 1968. For purposes of subsections (a) and (b), in the case of communications services rendered after January 31, 1968, and before November 1, 1968, for which a bill has not been rendered before January 1, 1969, a bill shall be treated as having been first rendered on December 31, 1968.” (b) Nonprofit Hospitals.— Section 4253 (relating to exemptions from tax on communications) is amended by adding at the end thereof the following new subsection: “(h) Nonprofit Hospitals.—No tax shall be imposed under section –1251 on any amount paid by a nonprofit hospital for services furnished to such organization. For purposes of this subsection, the term ‘nonprofit hospital’ means a hospital referred to in section 503(b)(5) which is exempt from income tax under section 501 (a).” (c) Effective Date.—The amendments made by subsections (a) and (b) shall apply to amounts paid pursuant to bills first rendered on or after April 1, 1966, for services rendered on or after such date. In the case of amounts paid pursuant to bills rendered on or after such date for services which were rendered before such date and for which no previous bill was rendered, such amendments shall apply except with respect to such services as were rendered more than 2 months before such date. In the case of services rendered more than 2 months before such date, the provisions of subchapter B of chapter 33 of the Code in effect at the time such services were rendered, subject to the provision of section 701 (b)(2) of the Excise Tax Reduction Act of 1965, shall apply to the amounts paid for such services,