Tax Type
Individual Income Tax
Description
Profits from trading in tax exempt bonds
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
06-14-1985
June 14, 1985
RE: Ruling Request/Individual Income Tax
Profits from Trading in Tax Exempt Bonds
Dear ****
This will reply to your letter of April 30, 1985, on behalf of ***** requesting a ruling on the application of Virginia income tax law to profits realized from trading in certain bonds.
According to your letter, the bonds in question were issued pursuant to Title 23 of the Virginia Code, "Educational Institutions", Chapter 3, "Bonds and Other Obligations".
§23-14 of the Code declares certain educational institutions to be government instrumentalities for the dissemination of education. The "rectors and visitors of the University of Virginia at Charlottesville" are specifically included within this declaration.
§ 23-19 of the Code authorizes every institution included within the above referenced declaration to execute bonds from time to time to finance any "project". "Project" is defined in § 23-15 as "any building, facility, addition, extension, or improvement of a capital nature required by or convenient for the purposes of an educational institution."
Lastly, § 23-25 of the Code states to the extent permitted under the Virginia Constitution, "the bonds of such institutions shall be exempt from taxation except for inheritance taxes." Therefore, the income derived from the bonds described in your letter is exempt from income taxation by Virginia. The list of exempt securities to which you refer in your letter was compiled several years ago, and is no longer an accurate statement of departmental policy.
However, in the absence of changes in applicable law, you may rely upon this ruling as representing the position of the Department of Taxation.
I hope that all of the above has answered your question, but please let me know if I can be of further assistance.
Sincerely,
W. H. Forst
Tax Commissioner
RE: Ruling Request/Individual Income Tax
Profits from Trading in Tax Exempt Bonds
Dear ****
This will reply to your letter of April 30, 1985, on behalf of ***** requesting a ruling on the application of Virginia income tax law to profits realized from trading in certain bonds.
According to your letter, the bonds in question were issued pursuant to Title 23 of the Virginia Code, "Educational Institutions", Chapter 3, "Bonds and Other Obligations".
§23-14 of the Code declares certain educational institutions to be government instrumentalities for the dissemination of education. The "rectors and visitors of the University of Virginia at Charlottesville" are specifically included within this declaration.
§ 23-19 of the Code authorizes every institution included within the above referenced declaration to execute bonds from time to time to finance any "project". "Project" is defined in § 23-15 as "any building, facility, addition, extension, or improvement of a capital nature required by or convenient for the purposes of an educational institution."
Lastly, § 23-25 of the Code states to the extent permitted under the Virginia Constitution, "the bonds of such institutions shall be exempt from taxation except for inheritance taxes." Therefore, the income derived from the bonds described in your letter is exempt from income taxation by Virginia. The list of exempt securities to which you refer in your letter was compiled several years ago, and is no longer an accurate statement of departmental policy.
However, in the absence of changes in applicable law, you may rely upon this ruling as representing the position of the Department of Taxation.
I hope that all of the above has answered your question, but please let me know if I can be of further assistance.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner