ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, March 23, 1996 TAG: 9603250051
SECTION: VIRGINIA PAGE: C-3 EDITION: METRO
DATELINE: RICHMOND
Checks totaling $62.5 million will be mailed by the end of March to federal retirees participating in a settlement with the state, which illegally taxed their pensions.
Virginia Department of Taxation spokeswoman Dianne Lee DeLoach said almost 96,000 checks will be mailed, and about 24,800 federal retirees will be paid in full. The state previously paid $124.6 million to retirees who agreed to the settlement.
Virginia was one of 23 states affected by a 1988 U.S. Supreme Court ruling in a Michigan case that states could not tax federal retirees while exempting state and local government pensions.
The General Assembly changed Virginia's scheme immediately after the ruling, but federal retirees sued for refunds of taxes paid since 1985. About 153,000 retirees agreed to a settlement paying them $308 million, about 76 percent of what they were owed.
More than 14,000 retirees refused to settle, and the Virginia Supreme Court last year ruled they were owed full refunds. The state has paid them about $80 million.
Retirees who agreed to the settlement are being paid over five years.
- Associated Press
LENGTH: Short : 33 linesby CNB