
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, March 17, 1990                   TAG: 9003172245
SECTION: VIRGINIA                    PAGE: A4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: ALEXANDRIA                                 LENGTH: Short

PENSION REFUND APPEAL PLANNED

Federal retirees whose effort to collect $400 million in pension tax refunds was stymied by Alexandria Circuit Judge Donald H. Kent have filed a notice of appeal, an attorney for the group said Friday.

Attorney David Weiser said the notice was filed Thursday in Alexandria Circuit Court. He said a petition of appeal to the Virginia Supreme Court will be filed in four to six weeks.

"The notice of appeal just starts the ball rolling," Weiser said.

Kent last month rejected retirees' claims for refunds of illegally collected pension taxes going back to 1985. The pension tax "was not erroneous or improper at the time it was assessed" in 1942 and ordering retroactive refunds "would result in inequity, injustice and hardship," the judge wrote.

Until last April, Virginia taxed the pensions of federal retirees while exempting state and local government pensions. A U.S. Supreme Court ruling in a Michigan case outlawed such procedures, and the General Assembly conducted a special session to fix the state law.

The state refused, however, to pay refunds for taxes collected during the years covered by the statute of limitations for seeking refunds.

The Virginia chapter of the National Association of Retired Federal Employees sued, claiming the money collected from an illegal tax should be returned.

Attorney General Mary Sue Terry has contended that the state could not have anticipated the U.S. Supreme Court ruling and that refunds would hurt a state government already crippled by a weakening national economy.

by CNB