Tax Type
Individual Income Tax
Description
State Legislator's Travel Expenses Away From Home
Topic
Taxability of Persons and Transactions
Date Issued
04-23-1982
Date: April 23, 1982
Subject: State Legislator's Travel Expenses Away From Home
The Economic Recovery Act of 1981 added new provisions to § 162 of the Internal Revenue Code concerning state legislators' travel expenses. The new provisions apply retroactively to taxable years beginning on or after January 1, 1976.
Under the new provisions a state legislator is considered to be away from home in pursuit of a trade or business on each legislative day. A legislative day is defined as any day the legislature is in session (including any day in which the legislature was not in session up to a period of four consecutive days), or any day when the legislature is not in session provided the legislator's physical presence is formally recorded at a legislative committee meeting. "Legislative days" do not include the days of any recess period of more than four consecutive days. The four day limit is not extended by Saturdays, Sundays or holidays. This provision applies without regard to the location of the legislator's residence, but only for years beginning on or after January l, 1976 and before December 31, 1980. For years beginning on and after January 1, 1981, this provision applies only when the legislator's place of residence within the legislative district represented is more than 50 miles from the state capitol building.
Travel expenses of a legislator (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home on legislative business are allowable business expenses. Furthermore, if an election is made under the new provisions, in lieu of actual expenses, a legislator will be deemed to have expended for such living expenses for each legislative day while away from home an amount equal to the greater of 1) the state per diem allowance to the extent such amount does not exceed the federal per diem allowance by more than 10 percent, or, 2) the federal per diem allowance.
The federal per diem rate for the Richmond area from January 1, 1976 through October 43 1980 amounted to $35.00 per day. From October 5, 1980 through December 31, 1981 the federal rate was $50.00 per day. The State per diem rate from January 1976 through March 1980 was $44.00 per day and from March 1980 through 1981, it was $50.00 per day. The state allowed actual expense for other than regular session periods.
To compute the income adjustment for claims purposes multiply the number of regular legislative session days plus the deemed legislative days by the federal per diem plus 10 per cent and subtract from that amount the per diem allowed plus actual expense allowed. Do not include travel expenses (mileage, fares, tolls, etc.).
Claims under these new provisions may be filed for overpayment of federal income tax for any year still open under federal law. In most cases, the three year federal statutory period for filing a claim will apply. Therefore, only years 1979, 1980 and 1981 will be open under federal law.
Since state law conforms to federal law in this new deduction, claims for refund of state income tax may be filed by amended returns for any year open under state law. In accordance with the state statute for filing of claims for refunds, the amended state return must be filed three years from the due date of the original return or sixty days from the final determination of a change in the taxpayer's liability for any federal tax as a result of this federal deduction. The state three year statutory period for taxable year 1978 expires at midnight, April 30, 1982.
§ 162(i) 9 originally enacted as § 162(h) of the Internal Revenue Code of 1954 as amended by the Economic Recovery Tax Act of 1981, contains the provisions discussed in the above paragraphs.
Questions should be addressed to the Department of Taxation, Technical Services §, P.O. Box 6-L, Richmond, Virginia 23282, Attention: William H. Edmonds (804) 257-0952 or Timothy S. Turner (804) 257-0763.
Rulings of the Tax Commissioner