Opinion Number
10-107
Tax Type
Individual Income Tax
Description
Classification of individual being permanently and totally disabled.
Topic
Classification
Exemptions
Local Taxes Discussion
Date Issued
10-22-2010
October 22, 2010





Stephen A. MacIsaac, Esquire
County Attorney, Arlington County
2100 Clarendon Boulevard, Suite 403
Arlington, Virginia 22201

Dear Mr. MacIsaac:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented


You inquire whether an applicant for tax relief under § 58.1-3210, who has obtained a signed statement from a doctor stating that the applicant is permanently incapacitated, yet who has been a full-time employee of a governmental agency for over a decade, where he currently earns an annual salary of $44,000, is engaged in "any substantial gainful activity."

Response


It is my opinion that, under the plain language of § 58.1-3210, an individual who is employed full-time and who continues to earn a substantial salary is engaged in "substantial gainful activity" and is, therefore, ineligible for tax relief under § 58.1-3210.

Applicable Law and Discussion


Section 58.1-3210 of the Code of Virginia authorizes localities to "provide for the exemption from, deferral of, or a combination program of exemptions from and deferrals of taxation of real estate . . . owned by and occupied as the sole dwelling of anyone at least 65 years of age, or if provided in the ordinance, anyone found to be permanently and totally disabled."1 Although exemptions under § 58.13210 must be strictly construed, 2 the General Assembly has provided localities with some flexibility "in determing the scope of the exemptions."3 The Code imposes three considerations for tax relief: (1) age or disability; (2) income; and (3) net worth .4 Your inquiry focuses on the disability requirement.

First, as to disability, both the Code of Virginia and Arlington County define "[p]ermanently and totally disabled" as being "unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment or deformity which can be expected to result in death or can be expected to last for the duration of such person's life."5 The Virginia Code does not define further what constitutes "substantial gainful activity."

Section 58.1-3213(D) details three ways for a taxpayer to demonstrate permanent disability: 1) certification by the Social Security Administration, the Department of Veteran Affairs, or the Railroad Retirement Board; 2) Social Security Administration certification regarding eligibility for benefits pursuant to 42 U.S.C. § 423(d); or 3) sworn affidavits by two qualified medical doctors attesting that the applicant is "permanently and totally disabled."

A taxpayer who obtains this documentation establishes a prima facie case of a disability. That, however, does not end the inquiry. The statute further provides that the County "shall also make any other reasonably necessary inquiry of persons seeking such exemption, . . . including qualification as permanently disabled."6 Merely obtaining an affidavit from a physician, or using one of the other methods under the statute to demonstrate disability, does not conclusively establish disability. When a locality is aware of evidence that contradicts the applicant's claimed disability, the locality can investigate and reach its own determination of whether the individual truly is "unable to engage in any substantial gainful activity." A person's track record in substantial gainful activity, as manifested by a continuous record of past and present employment at a respectable salary, constitutes compelling circumstantial evidence that this individual can, in fact, "engage in substantial gainful activity."7

                      • Conclusion


Accordingly, it is my opinion that, under the plain language of § 58.1-3210, an individual who is employed full-time and who continues to earn a substantial salary is engaged in "substantial gainful activity" and is, therefore, ineligible for tax relief under § 58.1-3210.
    • With warmest regards, I am
                          • Very truly yours,

                          • Kenneth T. Cuccinelli, II
                            Attorney General
1 VA. CODE ANN. § 58.1-3210 (2009). Arlington County has adopted such an ordinance; ARLINGTON COUNTY, VA., CODE §§ 43-1 through 43-9 (2008).
2. See VA. CONST. art. X § 6(f),
3 1994 Op. Va. Att'y Gen. 117, 120. For example, localities may exclude from total combined income any disability benefits up to $5,000 and up to $10,000 of all income for permanently disabled applicants; and in calculating financial worth, a locality may exclude the value of certain furnishings and may annually increase the limit by an amount equal to the previous year's increase in the Consumer Price Index. VA. CODE ANN. § 58.1-3211 (2009).
4 Sections 58.1-3210; 58.1-3211.
5. Section 58.1-3217 (2009); ARLINGTON COUNTY, VA., CODE § 43-1 (2008).
6 Section 58.1-3213(E) (2009).
7 A prior opinion of this office concluded that an income standard found in a federal statute is not a proper guideline for determining a taxpayer's disability status. 2010 Op. Va. Att'y Gen. 10-057. You indicate that the County consults the SSA wage index as one of several criteria for determining whether an individual is permanently and totally disabled. You further note that this standard is not used in lieu of the income and net worth requirements of § 58.1-3211. In my view, a taxpayer may earn less than this federal standard and be ineligible for tax relief under § 58.1-3210, or may earn more and remain eligible, depending on the specific facts at hand. The County may consult a federal or other standard, for example as a "tripwire" to launch an investigation of a claimed disability, so long as the borrowed standard does not become a substitute for the fact-specific determination contemplated by § 58.1-3217: whether a particular individual is "unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment or deformity which can be expected to result in death or can be expected to last for the duration of such person's life."




Attorney General's Opinion

Last Updated 08/25/2014 16:43