Court Opinion

ID: 3264244
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:34:01.599474+00
Date Added: 2024-06-11T13:08:13.791473
License: Public Domain

The Honorable Randy Bryant State Representative 14138 DeGraff Road Rogers, AR 72758
Dear Representative Bryant:
This is in response to your request for an opinion on behalf of the Bella Vista Fire Department regarding Social Security withholding. The question posed is whether the fire department meets the requirements set forth in the federal social security law for an exemption. See 42 U.S.C. § 418.
It is my understanding that the Internal Revenue Service makes the initial determination regarding an exemption, and that an exemption will only apply if the individuals are employees of a political subdivision of the state.1 This poses a problem for the Bella Vista Fire Department in that the department primarily serves the planned community property owners' association of Bella Vista, which is not itself a "political subdivision" under Arkansas law.
As noted in the correspondence attached to your request, the majority of the firefighters are members of the Arkansas Local Police and Fire Retirement System (LOPFI). Under the body of law establishing LOPFI, the term "political subdivision" includes "nonprofit corporations formed for fire protection purposes. . . ." A.C.A. § 24-10-101 (Repl. 1992). And, as noted, Bella Vista participates in the distribution of insurance premium tax revenues for fire protection to the same extent as cities, towns, and fire protection districts having fire departments. A.C.A. § 24-11-811
(Repl. 1992). Thus, for these purposes the department is treated as a political subdivision. It appears, however, that these factors are not conclusive for purposes of the exemption from Social Security withholding. Rather, it seems that the fire department must establish that it serves an entity generally qualifying as a political subdivision.
In conclusion, therefore, to the extent the Internal Revenue Service requires a showing that the Bella Vista Fire Department is, generally, a "political subdivision" or that it serves a "political subdivision" of the state, it is my opinion that this requirement cannot be met.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.
Sincerely,
WINSTON BRYANT Attorney General
WB:EAW/cyh
1 To the extent that this question involves an interpretation of the federal law requirements, I must note that such inquiries are properly referred either directly to the Internal Revenue Service or to the Office of the U.S. Attorney. I cannot, in the context of an opinion from this office, advise as to the substantive federal requirements.