In Virginia, how much tax relief -- if any -- the elderly and the handicapped receive depends on where they live. That is not only unfair, but unintentional.

In 1971 the state General Assembly added Section 58.1-3211 to the Code of Virginia, which allows cities, counties and towns to exempt the elderly and the handicapped from some real estate taxes. But Section 58.1-3211 turned out to be a far-from-precise piece of legislation. Individual localities found that they had lots of leeway in interpreting how much tax relief they were to give to the disabled and those 65 and over, especially the self-employed.

Much amended during the past 19 years to keep up with inflation, the legislation now directs that eligibility for tax relief be restricted to those who, with other family members in the same house, have a yearly "total combined income" of less than $22,000.

But in Chesapeake, for example, the ordinance was changed to read "gross combined income." The Chesapeake city attorney's office "is of the opinion that the terms are synonymous." But that doesn't wash.

Say, for example, a 65-year-old man buys 100 pounds of apples for $100, then sells them for $200. Is his tax relief figured on the gross income of $200 or the net income of $100? In Chesapeake -- and in Culpeper County, and perhaps other Virginia communities -- his tax relief would be based on his gross income of $200, not his real earnings of $100.

But if he lived in Norfolk, Virginia Beach, Suffolk, Portsmouth, Hampton or Newport News -- and most other places in Virginia -- he would be permited to "deduct the cost of producing his goods and services."

In most Virginia cities, his tax-relief application would contain information from Page 1 of federal income tax Form 1040. But in Chesapeake and Culpeper County, the information would come from Line 1a (gross receipts or sales) of Schedule C (profit or loss from business), which eliminates some of the elderly and handicapped from the program and severely limits participation by others.

To compound the unfairness, in Chesapeake, at least, an employee of the revenue commissioner fills out the application forms based on information provided by aged and disabled applicants. These applicants must sign an affidavit stating that the application is correct without being permitted to see it (through they can obtain copies of their applications through the Virginia Freedom of Information Act.)

On July 15, 1987, the state attorney general did offer an opinion on this "combined" vs. "gross" income issue.

Dorothy Schaeffer, then commissioner of the revenue for Culpeper County, had asked whether net or gross income should be used in computing tax exemptions for the self-employed.

The attorney general replied, "the term 'income' is not defined in the code. It also has no generally accepted meaning in income-tax law, which uses such terms as 'gross income,' 'adjusted gross income' 'adjusted gross income' or 'taxable income.'

"It appears, therefore, that the General Assembly did not intend to refer to income tax principles when using the term 'income' in Section 58.1-3211. ... Based on the above, I am of the opinion that gross income should be used as the basis for determining the income eligibility limitations in 58.1-3211."

State law prohibits localities from enacting ordinances more restrictive than the commonwealth's, yet some localities in the way they chose to interpret Section 58.1-3211, seem to be doing just that. In the interest of fairness, differences in how programs of tax relief are administered should be considered by the next General Assembly.

Carl Cahill