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2003 SESSION

032520980
HOUSE BILL NO. 2725
Offered January 16, 2003
A BILL to amend and reenact § 58.1-321 of the Code of Virginia, relating to the individual income tax liability of certain persons who have died as a result of a terrorist attack.
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Patron-- Watts
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Referred to Committee on Finance
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Be it enacted by the General Assembly of Virginia:

1. That § 58.1-321 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-321. Exemptions and exclusions.

A. No tax levied pursuant to § 58.1-320 is imposed, nor any return required to be filed by:

1. A single individual where the Virginia adjusted gross income for such taxable year is less than $3,000 for taxable years beginning before January 1, 1987; and less than $5,000 for taxable years beginning on and after January 1, 1987;

2. An individual and spouse if their combined Virginia adjusted gross income for such taxable year is less than $3,000 for taxable years beginning before January 1, 1987; and less than $8,000 for taxable years beginning on and after January 1, 1987 (or one-half of such amount in the case of a married individual filing a separate return).

For the purposes of this section "Virginia adjusted gross income" means federal adjusted gross income for the taxable years with the modifications specified in subsection B of § 58.1-322 B, subsection C of § 58.1-322 C and the additional deductions allowed under subdivisions D 2 b and D 5 of § 58.1-322 D 2 b and D 5.

B. No tax levied pursuant to § 58.1-320 is imposed on, nor any return required to be filed on behalf of, any victim of the September 11, 2001, terrorist attacks on or involving the World Trade Center Towers in New York, New York, the Pentagon, or the crash of United Airlines Flight 93 southeast of Pittsburgh, or the spouse of such victim. This exemption from individual income tax and from the filing of an individual income tax return shall only apply to income earned or realized in the taxable year in which such victims died. If any individual income tax return has been filed with the Department of Taxation by or on behalf of such individuals for such taxable year, an amended return may be filed pursuant to § 58.1-1823. In addition, an application to the Tax Commissioner may be made under the provisions of § 58.1-1822 for a refund of (i) income withheld from such individuals for such taxable year pursuant to Article 16 (§ 58.1-460 et seq.) of Chapter 3 of this title, or (ii) income taxes paid in conjunction with the filing of an individual income tax return by or on behalf of such individuals for such taxable year.

For purposes of this subsection, "victim of the September 11, 2001, terrorist attacks" means those individuals who were killed as a result of such terrorist attacks or killed in attempting to rescue or recover other persons injured or killed by such attacks, but not including any individual who participated in such attacks.

BC. Persons in the armed forces of the United States stationed on military or naval reservations within Virginia who are not domiciled in Virginia shall not be held liable to income taxation for compensation received from military or naval service.

2. That the provisions of this act are effective for taxable years beginning on or after January 1, 2001.