Federal Election Commission Main Page
July 1, 1983
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1983-15
J. Curtis Herge, Esq.
Sedam and Herge
8300 Greensboro Drive
McLean, Virginia 22102
Dear Mr. Herge:
This responds to your letter of May 3, 1983, requesting an
advisory opinion on behalf of your client, the Republican Party
of Virginia, concerning application of the Federal Election
Campaign Act of 1971, as amended ("the Act"), and Commission
regulations to the distribution of State tax monies collected by
means of a voluntary checkoff system.
Specifically, you ask whether the Republican Party of
Virginia ("the party") may deposit in its Federal election
account amounts paid to it by the State Treasurer pursuant to the
provisions of Section 58-151.072:2 of the Code of Virginia, and
if so, how such a transaction should be reported.
As you note in your request, Section 58-151.072:2 of the
Code of Virginia states the following:
Voluntary contribution to political party. - A. Any
individual eligible to receive a tax refund pursuant to
SS 58-151.072 may designate at the time of filing his
return that two dollars of such refund be paid to the
State Central Committee of any party which meets the
definition of a political party under 324.1-1 of the
Code of Virginia as of July 1 of the previous taxable
year. In the case of a joint return of husband and
wife, each spouse may designate that two dollars be
paid.
B. The State Tax Commissioner shall revise the state
income tax return form as necessary to permit a
voluntary check-off refund designation as outlined in
subsection A. All money collected pursuant to this
section shall be deposited into the state treasury.
C. The State Tax Commissioner shall determine by
June 30 of each year the total amount designated for
each party during that year. The direct costs of
administration shall be deducted in equal amounts from
each party's share. The Commissioner shall report the
same to the State Treasurer, who shall pay that amount
to the appropriate party. (1982, c. 351.)
This provision became effective for the taxable year
beginning January 1, 1982. Under Section 24.1-1 of the Code of
Virginia, the terms "party" and "political party" are defined as
follows:
(7) "Party" or "political party" shall mean an
organization or affiliation of citizens of the
Commonwealth which, at the last preceding statewide
general election, polled at least ten percent of the
total vote cast for the office filled in that election
by the voters of the Commonwealth at large. Such
organization or affiliation of citizens shall also have
a state central committee and a duly elected chairman
which have continually been in existence and holding
office for the six months preceding the filing of a
nominee[.]
For 1982, the only qualifying parties were the Democratic and
Republican Parties of Virginia. See 1982 Virginia Individual
Income Tax Return, Forms 760 and 760S. The Virginia Code neither
restricts nor prescribes the purposes for which the recipient
party committees may use the funds they receive under the tax
checkoff plan.
The Commission notes initially that amounts "checked off"
pursuant to this checkoff system would constitute contributions
by individual taxpayers to the party for purposes of the Act only
to the extent the party decides to deposit those funds in its
Federal account. 2 U.S.C. SS 431(8)(A) and 11 CFR 100.7(a). The
only persons eligible to participate in this system are
individual taxpayers who are owed a refund. By electing to
donate funds via this mechanism to one of the two parties, these
taxpayers are assigning two dollars that would otherwise be
refunded to them and are thereby making a contribution. */
Under the Act and Commission regulations, the treasurer of a
political committee must keep an account of all contributions
received by the committee. For any contribution over $50 the
account must include the date and amount of the contribution as
well as the name and address of the person who made the
contribution. 2 U.S.C. SS 432(c)(2). In addition, the treasurer
must keep records identifying each contribution aggregating more
than $200 during a calendar year from the same person, and must
include the full name and mailing address of the person,
occupation and employer's name, the date of receipt, and the
amount of the contribution. 2 U.S.C. SS 432(c)(3) and 11 CFR
102.9(a)(2). Similarly, all contributions by a person in excess
of the $200 aggregate amount must be itemized on reports filed by
the recipient committee. 2 U.S.C. SS 434(b)(3)(A) and 11 CFR
104.3(a)(4).
In the particular situation presented here, however, the
Commission concludes that, although the amounts checked off by
the individual taxpayers are contributions, such recordkeeping
and itemized reporting of contributors would not be required
under the Act. The amount of each contribution is $2,
substantially less than both the $50 threshold for recording the
name of the contributor and the $200 aggregation threshold. See
discussion above. Furthermore, in these circumstances the
Commission views the resulting contribution as similar to an
anonymous cash (currency) contribution, which the donee is
permitted to accept in amounts up to $50 even though, by virtue
of other recorded contributions, the donor may have exceeded the
$200 disclosure threshold or the applicable contribution limit,
or both. See 11 CFR 110.4(c) (3).
*/ The Virginia checkoff system is distinguishable from other
mechanisms for funding state parties previously considered by the
Commission. In both Advisory Opinion 1978-9 and Advisory Opinion
1980-103, the Commission considered checkoff systems under which
a taxpayer did not increase his or her tax liability (or reduce a
refund) by designating money for a state party. Similarly in
Advisory Opinion 1982-17, the Commission found that no
contribution resulted from a fee-for-service arrangement
involving proceeds from sales of personalized license plates.
Copies of these opinions are enclosed.
With respect to the specific question raised by your
request, the Commission concludes that the party may deposit
funds received from the State Treasurer pursuant to this
mechanism in its Federal account. The Commission also concludes
that the funds received by the party, (for its Federal account)
pursuant to this system should be reported as unitemized
contributions. Although not required by the Act or regulations,
it would be helpful if the party noted that the funds are derived
from the Virginia individual income tax checkoff plan for
political parties. This reporting method would permit disclosure
of the significant role played by the State both in the making of
the contributions and in their ultimate transfer to the party.
This response constitutes an advisory opinion concerning
application of the Act, or regulations prescribed by the
Commission, to the specific transaction or activity set forth in
your request. See 2 U.S.C. SS 437f.