Chap. 398.—An ACT to amend and re-enact Section 24 of the Tax Code of Vir-
ginia, as heretofore amended, in relation to the definition of gross income. [H 391]

Approved March 31, 1944

Be it enacted by the General Assembly of Virginia:

1. That section twenty-four of the Tax Code of Virginia, as here-
tofore amended, be amended and re-enacted so as to read as follows:

Section 24. Definition of gross income.—The term “gross income’’,
as used herein, includes gains, profits and income derived from salaries,
wages or compensation for personal services of whatever kind and in
whatever form paid, or from professions, vocations, trades, business,
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 transactions 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 beneficiaries thereof, whether as distribu-
tive or as distributable shares. For the taxable year nineteen hundred and
thirty-nine and for every taxable year thereafter, the term “gross in-
come”, as used herein, includes compensation, received after December
thirty-first, nineteen hundred and thirty-eight, for personal service as
an officer or employee of the United States, any territory or possession
or political subdivision thereof, the District of Columbia, or any agency
or instrumentality 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 “gross
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 mentioned
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, devices 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 personal
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 services in armed forces, whether such
service was rendered by the recipient of the pension or by a relative
by blood or marriage.

(h) Pay and allowances received from the United States by a
person in the armed forces of the United States for active service in
such forces in the taxable years nineteen hundred and forty-two and
nineteen hundred and forty-three to an amount not exceeding five hundred
dollars in either taxable year, but any amount so received in excess of
five hundred dollars in either taxable year shall be included in gross
income to the extent of such excess; also pay and allowances received
from the United States by a person in the armed forces of the United
States for active service in such forces in the taxable years nineteen
hundred and forty-four and nineteen hundred and forty-five to an
amount not exceeding one thousand dollars in either such taxable year,
but any amount so received in excess of one thousand dollars in either
taxable year shall be included in gross income to the extent of such
excess.

(1) Persons in the armed forces of the United States stationed on
military or naval reservations within Virginia who are not domiciled
in Virginia and who maintain no place of abode in Virginia shall not
be held liable to income taxation on the ground that they are so stationed
and perform services on such reservations or elsewhere in this State.
This paragraph shall be in force for the taxable year nineteen hundred
and forty-one and for every taxable year thereafter until otherwise pro-
vided by law.