Action line 90201 - tax exemption

  • Published
  • By Anonymous
  • 39th Air Base Wing Public Affairs
INCIRLIK AIR BASE, Turkey --  Complaint: 

DoD removed Incirlik from the list of Combat Zone tax exempt locations in 2005. The Cargo Hub was established in 2006. I feel we are doing a disservice to ourselves for not perusing a tax exempt status for Incirlik. Has the appropriate office taken action on the below guidance?

Below excerpt taken from page 9, Armed Forces' Tax Guide 2008:

Service Outside Combat Zone Considered Service in Combat Zone

Military service outside a combat zone is considered to be performed in a combat zone if:
· Department of Defense designates that the service is in direct support of military operations in the combat zone, and

· The service qualifies you for special military pay for duty subject to hostile fire or imminent danger.

Military pay received for this service will qualify for the combat zone exclusion if all of the requirements (other than service in a combat zone) are met and the pay is verifiable by reference to military pay records.

Response: 

Thanks for taking the time to write. There has been a lot of confusion in this area and I welcome the opportunity to set the record straight. 

As you correctly point out, our pay here is not exempt from federal taxes. In order for military pay to qualify for the combat zone exclusion, you must either serve in a combat zone, or be designated by the Department of Defense as serving in direct support of military operations in the combat zone while receiving hostile fire or imminent danger pay.

While we briefly enjoyed the status of a combat support zone during our initial operations in Afghanistan and Iraq, it was clear from the beginning our designation was only temporary. I assure you the wing staff here did not make or encourage the decision that led to our removal in 2006. Combatant commanders make these determinations, which in our case is U.S. European Command (EUCOM). EUCOM routinely monitors identified areas in its theater to ensure the combat zone requirements still apply. In 2005, EUCOM determined Turkey no longer met the requirements and recommended our removal. The Secretary of Defense agreed and removed our designation effective 1 January 2006.

I believe the support we provide is as important now as it was then, but the decision does make sense when you compare our situation with those areas that are still entitled to the exclusion. For 2008, the Department of Defense only designated the following locations as providing direct support: Pakistan, Tajikistan, Jordan, Kyrgyzstan, Uzbekistan, Philippines (only troops with orders referencing Operation Enduring Freedom), Yemen, Djibouti, and Somalia. Just a cursory review of these countries should indicate why Turkey is different. The biggest distinction, though, is our ability to have our families here with us. This probably does not mean much for our deployed personnel, but it is very important to our members with dependents who are permanently stationed here. 

I'm with you: I'd love to have the Department of Defense designate us for the combat zone tax exclusion again; don't think it will happen anytime soon. In the meantime, keep up the great work and thanks again for writing!