Tax Type
Individual Income Tax
Description
individual income tax subtraction for state and federal employees
Topic
Persons Subject to Tax
Subtractions and Exclusions
Taxable Income
Date Issued
04-17-2008
April 17, 2008
Re: Request for Ruling: Individual Income Tax
Dear *****:
This will reply to your correspondence in which you request a ruling regarding the individual income tax subtraction for state and federal employees.
FACTS
The Taxpayer is a part-time employee of the ***** (the "Foundation"). A ruling is requested as to whether the Foundation is a state agency for purposes of the subtraction granted to state and federal employees under Virginia Code § 58.1-322 C 24.
RULING
Virginia Code § 58.1-322 states, "The Virginia taxable income of a resident individual means his federal adjusted gross income for the taxable year, which excludes combat pay for certain member, of the Armed Forces of the United States as provided in § 112 of the Internal Revenue Code, as amended, and with the modifications specified in this section." Subsection C 24, states, to the extent included in federal adjusted gross income, there shall 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 total annual salary from all employment for the taxable year is $15,000 or less.
The Foundation was established by the General Assembly in 1966 for the purpose of promoting open space land preservation and to encourage private gifts to preserve the natural, scenic, historic, scientific, open-space and recreational areas of Virginia. See Va. Code § 10.1-1800. In conjunction with its purpose, the Foundation holds easements under the Open-Space Land Act of 1966. Only public entities, such as the Foundation, are authorized to hold easements under the Open-Space Land Act.
Under Va. Code § 10.1-1801, all real and personal property owned by the Foundation, as well as contractual obligations, pass to the Commonwealth in the event the Foundation is dissolved. Further, the Foundation may promulgate regulations under the Administrative Process Act, Va. Code § 2.2-4000 et seq. The Foundation is also prohibited from engaging in business that is not consistent with the furtherance of its objectives.
Based on these facts and the cited statutes, the Foundation is charged with carrying out administrative, executive and regulatory functions on behalf of the Commonwealth. Accordingly, the Foundation is a Virginia state agency. An employee of the Foundation, therefore, is a state employee for purposes of the subtraction set forth under Va. Code § 58.1-322 C 24.
If you have any questions regarding this ruling, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-2167677950E
Rulings of the Tax Commissioner