Chap. 68.—An ACT to amend and re-enact Sections 24 and 31 of the Tax Code of
Virginia, as heretofore amended, in relation to income taxes. {[H B 96}

Approved February 22, 1940

1. Be it enacted by the General Assembly of Virginia, That
sections twenty-four and thirty-one of the Tax Code of Virginia, as
heretofore amended, be amended and re-enacted so as to read as
follows:

Section 24. Definition of gross income.—The term “gross in-
come,’’ as used herein, includes gains, profits and income derived
from salaries, wages or compensation for personal services of what-
ever kind and in whatever form paid, or from professions, vocations,
trades, businesses, commerce, or sales or dealings in property, whether
real or personal, growing out of the ownership, or use, or interest in
such property; also from rent, interest, dividends, securities or trans-
actions of any business carried on for gain or profit, or gains or profits
and income derived from any source whatever, including gains or
profits and income derived through estates or trusts by the bene-
ficiaries thereof, whether as distributive or as distributable shares.
For the taxable year nineteen hundred and thirty-nine and for every
taxable year thereafter, the term “gross income,” as used herein,
includes compensation, received after December thirty-first, nineteen
hundred and thirty-eight, for personal service as an officer or em-
ployee of the United States, any territory or possession or political
subdivision thereof, the District of Columbia, or any agency or in-
strumentality of any one or more of the foregoing; and the term
“officer or employee” includes a member of a legislative body, a
judge or officer of a court, and a person in the armed forces.

The amount of all such items shall be included in the gross income
for the taxable year in which received by the taxpayer, unless under
the methods of accounting permitted herein, such amounts are to
be properly accounted for as of a different period; but the term
‘“‘sross income’”’ does not include the following items, which shall be
exempt from taxation under this chapter:

(a) The proceeds of life insurance policies and contracts paid
upon the death of the insured.
(b) The amount received by the insured as a return of premium
or premiums paid by him under life insurance, endowment or annuity
contracts, either during the term or at the maturity of term men-
tioned in the contract, or at the surrender of the contract.

(c) The value of property acquired by gift, bequest, devise or
inheritance received during the year, but the income received from
such gifts, bequests, devises and inheritances shall be assessed under
the provisions of this chapter.

(d) Any amount received through accident or health insurance
or under the workmen’s compensation act as compensation for per-
sonal injuries or sickness, and the amount of any damages received,
whether by suit or agreement, on account of such injuries or sickness.

(e) Interest upon obligation of the United States or of this
State, and interest upon securities issued under the provisions of the
Federal farm loan act.

(f) Salaries, wages and other compensation received from the
United States by officers or employees thereof in any taxable year
prior to the taxable year nineteen hundred and thirty-nine.

(g) Pensions received from the United States or this State on
account of military or naval service in armed forces, whether such
service was rendered by the recipient of the pension or by a relative
by blood or marriage.

This section, as hereby amended, shall be in force for the taxable
year nineteen hundred and thirty-nine and for every taxable year
thereafter until otherwise provided by law.

Section 31. Information returns.—Every corporation subject to
the jurisdiction of this State shall, when required by the Department
of Taxation, render a correct return, duly verified under oath, of its
payments of dividends to residents of this State, stating the name
and address of each shareholder, the number of shares owned by
him, and the amount of dividends paid to him.

Every person, firm or corporation, subject to the jurisdiction of
this State, in whatever capacity acting, including lessees or mortgagors
of real or personal property, fiduciaries, and employers, making pay-
ment to another person, firm or corporation, of interest, rent, salaries,
wages, premiums, annuities, compensations, remunerations, emol-
uments, or other fixed or determinable gains, profits, and income
(other than payments described in the next preceding paragraph),
of one thousand dollars or more in any taxable year, or, in the case
of such payments made by the Commonwealth of Virginia and its
political subdivisions, or in the case of such payments made by the
United States or any agency or instrumentality thereof, the off-
cers or employees of this State or of its political subdivisions, or
of the United States or of any agency or instrumentality thereof,
having information as to such payments and required to make re-
turns in regard thereto by the regulations hereinafter provided for,
shall render a true and accurate return to the Department of Taxation,
under such regulations and in such form and manner and to such
extent as may be prescribed by it, setting forth the amount of such
gains, profits, and income, and the name and address of the recipient
of such payment. Such returns may be required, regardless of
amounts, in the case of payments of interest upon bonds, mortgages,
deeds of trust, or other similar obligations of corporations. When
necessary to make effective the provisions of this section the name
and address of the recipient of the income shall be furnished upon
demand of the person paying the income. The provisions of this
section shall not apply to the payment of interest on obligations of
the United States or of this State; nor shall the provisions of this
section be so construed as to require such information return as to
the recipient of any such payment as is hereinbefore described,
where such recipient is not subject to taxation under the income Jaws
of this State.

Corporations and partnerships required to file annually informa-
tion returns shall file the same on or before April fifteenth of each
year, and individuals required to file annual information returns
shall file the same on or before June first of each year. In all cases
such annual information returns shall give such information for the
calendar year next preceding the calendar year in which they are
required by this chapter to be filed.

2. An emergency existing, this act shall be in force from its
passage.