A University of Lynchburg professor and student recently completed a study of tax return data that reveals details about income and taxation in the Lynchburg area.
The study uses geographical tax return data to analyze a variety of information from tax returns in each ZIP code in the Lynchburg Metropolitan Statistical Area. The results show how Lynchburg-area incomes compare with those in other regions, but the information also may be useful in business and public policy, explained Dr. Gerald Prante, an economics professor in the LC School of Business and Economics.
“It informs policymakers of the importance of various federal tax policies to the Lynchburg area, such as the Earned Income Tax Credit,” said Dr. Prante. “The report could also give us an idea of how tax reform could affect the Lynchburg area.”
The information about incomes and tax returns in various ZIP codes of the region could be helpful to businesses selecting retail locations, he added. Also, the data is interesting from a sociological perspective because it shows segregation of income in the area.
Dr. Prante conducted the study with Patrick Clowdis a senior economics major and a graduate of Brookville High School.
Some highlights from the tax return data include:
- In tax year 2013, there were 110,710 tax returns with positive adjusted gross incomes filed by residents of the Lynchburg area.
- Tax returns filed from the Lynchburg MSA had an average adjusted gross income (AGI) of $51,012. The average statewide in Virginia was $69,697.
- Lynchburg area tax filers paid more than $508 million in federal individual income taxes to the IRS (after credits) on an aggregate adjusted gross income of over $5.6 billion. That is an average income tax rate of approximately 9%.
- The region’s residents received more than $49 million in Earned Income Tax Credit returns for tax year 2013.
- Of the five jurisdictions in the Lynchburg MSA, Bedford County residents had the highest average income ($58,945), while Appomattox had the lowest ($44,083). Lynchburg City had an average of $49,665. Campbell County’s average AGI was $45,536. Amherst County’s average AGI was $44,807.
- Only two local ZIP codes had an average AGI above the statewide average. The ZIP code 24503, which includes the Boonsboro area, had an average AGI of $88,933. The ZIP code 24551, which includes Forest, had an average AGI of $75,417.
- The 24501 ZIP code had an average AGI of only $31,371, which ranked near the bottom statewide.
The full report can be read here.