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The Virginia Supreme Court ruled this month that the state does not owe tax refunds that could total up to $400 million to retired federal workers.

Despite a 1989 U.S. Supreme Court decision requiring states to tax federal and state workers' pensions equally, the Virgin6ia high court said the state did not owe anything to the federal workers who, unlike state employees, had been paying income tax on their pensions since 1942.

The state court ruled unanimously that, because federal workers had paid the tax "without protest" until the high court's ruling, the state did not owe refunds to 200,000 retired federal employees.

The retirees' lawyer said he will appeal the case to the U.S. Supreme Court, where several similar state court decisions also await review.

Vol. 10, Issue 25

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