Tax Type
Individual Income Tax
Description
US Postal Service employees are not defined as employees of the federal government
Topic
Basis of Tax
Computation of Tax
Subtractions and Exclusions
Date Issued
11-04-2003
November 4, 2003
Re: § 58.1-1821 Application: Individual Income Tax
Dear ***************:
This is in reply to your letter addressed to the Commissioner of the Revenue for **** in which you appeal the adjustment to your Virginia Individual Income Tax return for the taxable year ended December 31, 2000. I apologize for the delay in responding to your letter.
FACTS
The Taxpayers claimed a subtraction for wages received from the United States Postal Service on their 2000 Virginia Individual Income Tax return. The Commissioner of the Revenue's office disallowed the subtraction. You contend that employees of the United States Postal Service are federal employees. The Taxpayers are, therefore, entitled to the subtraction under Va. Code § 58.1-322(C)(24) to certain employees of the federal government.
DETERMINATION
Virginia Code § 58.1-322(C)(24) provides that to the extent included in Federal Adjusted Gross Income, there will be subtracted:
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- Effective for all taxable years beginning on and after January 1, 2000, the first $15,000 of salary for each federal and state employee whose annual salary is $15,000 or less.
As a result, federal and state employees who receive an annual salary of $15,000 or less are allowed a subtraction for the amount of salary received from federal and state employment.
For purposes of Title 5 of the United States Code (U.S.C.) § 104, the United States Postal Service is not defined as an independent establishment of the United States government. Additionally, pursuant to 5 U.S.C.A. § 2105(e), United States Postal Service employees are not defined as employees of the federal government. Consequently, they are not considered federal employees for purposes of the subtraction provided under Va. Code § 58.1-322(C)(24).
Based on the foregoing, salaries and wages of United States Postal Service employees do not qualify for the Federal and State Employee Salary subtraction provided under Va. Code § 58.1-322(C)(24). Accordingly, I find no basis for allowing this subtraction on the Taxpayers' 2000 Virginia individual income tax return.
Copies of the United States Code sections cited are included for reference purposes. The Code of Virginia sections cited and other reference documents are available on-line in the Tax Policy Library section of the Department's web site, located at www.tax.state.va.us. If you have any questions regarding this ruling, you may contact ***** in the Department's Office of Policy and Administration, Policy Development, at *****. If further assistance is needed, please contact the Department's Customer Services unit at *****.
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- Sincerely,
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Kenneth W. Thorson
Tax Commissioner
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PD/33950N
Rulings of the Tax Commissioner