Meredith Construction Co. v. Holcombe
In Meredith Construction Co. v. Holcombe, 21 Va. App. 537, 466 S.E.2d 108 (1996), the claimant had an ongoing partial physical disability for which he had been receiving partial disability compensation.
Several years after his injury, Holcombe began operating a sole proprietorship. See id.
When his former employer learned of this fact several months later, it sought a re-calculation of Holcombe's ongoing partial wage loss, if any, based on his self-employment income. See id.
The commission ruled as follows:
Holcombe's earnings should be determined on a quarterly basis from the time he commenced operation of the sole proprietorship.
The average weekly wage should be based on the net taxable income reported by the business for federal income tax purposes.
This figure will, of course, include all allowable expenses, including, but not limited to, depreciation and interest.
Inasmuch as this is a sole proprietorship, any draws or salary paid to, or on behalf of, Holcombe from the business is included as taxable income.
Upon determination of Holcombe's net taxable income for each quarter, that number should be divided by the appropriate number of weeks in that quarter. . . . Holcombe's net taxable income can be calculated at the end of each quarter. In this regard he should make available to the employer . . . all books and records of the sole proprietorship so that income and expenses may be verified. Id.