THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, March 23, 1996 TAG: 9603230302
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: STAFF REPORT
LENGTH: Short : 35 lines
Some military and federal retirees soon will find in their mailboxes reason enough for a spring fling.
The second of five payments settling an old tax dispute will go to the post office next weekend.
The state will mail 95,949 checks with a value of $62.5 million. Of the recipients, 24,800 people will be paid in full.
The money goes to federal retirees who took the state's settlement offer - paying them 75 percent of the value of their overpayment of taxes for the years 1985-88.
In November 1995, a batch of 14,000 checks - totaling $78.7 million - paid the principal and interest on money retirees had anted up under a pension tax plan later ruled illegal.
In September 1995, the Virginia Supreme Court ruled that the state must make full refunds - plus interest - to retirees who rejected the General Assembly's settlement offer.
For the 150,000 retirees who took that offer, the checks go out every March through 1999. The dispute dates to a 1989 U.S. Supreme Court decision, which found that Virginia illegally taxed federal pensions while exempting state and local counterparts. Retirees with questions can call the Tax Department at (800) 730-8730. by CNB