Tax Type
Individual Income Tax
Description
Domicile; living arrangements in State A were short-term, informal
Topic
Domicile
Residency
Date Issued
02-01-2005
February 1, 2005
Re: § 58.1-1821 Application: Individual Income Tax
Dear **********:
This will reply to your letter in which you seek correction of the individual income tax assessments issued to ***** (the "Taxpayer") for the 1999 and 2000 taxable years. I note that the assessments have been paid in full. I apologize for the delay in responding to your appeal.
FACTS
In May 1999, the Taxpayer, a Virginia resident, moved to ***** ("State A"). The Taxpayer states that the move was precipitated by the termination of along-term, personal relationship and a promotion with his employer that required him to spend additional time in State A. The Taxpayer jointly owned a home in Virginia with the individual with whom he had the long-term relationship. The joint owner remained in the home until December 2000.
In State A, the Taxpayer lived with friends and paid rent, though no formal lease agreements were executed during the first 22 months the Taxpayer resided in State A. The Taxpayer purchased automobiles, obtained a driver's license, and registered to vote in State A. The Taxpayer's furniture remained at his home in Virginia. In March 2001, the Taxpayer signed a ten-month apartment lease with two fellow employees. Approximately two months later, the Taxpayer married Not to the person with whom the Taxpayer had a long-term relationship. and returned to Virginia with his new spouse to live in the jointly owned home.
An audit by the Department determined that the Taxpayer was a domiciliary of Virginia and was liable to Virginia for individual income tax on his 1999 through 2001 income. The Taxpayer contests the assessment for the 1999 and 2000 taxable years and requests a refund for the amounts paid, claiming to be a domiciliary resident of State A.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Code § 58.1-302. Domiciliary residence means the permanent place of residence of a taxpayer and/or the place to which he or she intends to return even though they may actually reside elsewhere. For an individual to change domiciliary residency to another state, that individual must intend to abandon his Virginia domicile with no intention of returning to Virginia. Concurrently, that individual must acquire a new domicile where that person is physically present with the intention to remain there permanently or indefinitely. An actual resident of Virginia means an individual who, for an aggregate of more than 183 days of the taxable year, maintained a place of abode within Virginia. A Virginia domiciliary resident working in other parts of the country, who has not abandoned his Virginia residency, continues to be subject to Virginia taxation. Additionally, an individual who is not a domiciliary resident of Virginia, but who stays in Virginia for an aggregate of more than 183 days is also subject to Virginia taxation as a resident.
In determining domicile, consideration may be given to an individual's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, profession or employment, income sources, residence of spouse, marital status, sites of real and tangible property, motor vehicle registration and licensing, and such other factors as may be reasonably deemed necessary to determine an individual's domicile. An individual's true intention must be determined with reference to all of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish domiciliary residency.
In this case, the Taxpayer moved out of his Virginia home after accepting a new position with his employer that required him to spend more time in State A. The Taxpayer registered to vote in State A, purchased and titled two automobiles and obtained a State A driver's license. He states that he spent approximately 17 days per month in State A while spending only two to three days per month in Virginia.
There are a number of actions that indicate the Taxpayer's intent to maintain a Virginia domicile. He maintained the jointly owned home in Virginia, paying utility bills and magazine subscriptions that remained in his name. While the Taxpayer did not return to that home for six months after moving to State A, he stayed there two to three per month thereafter. In addition, his work schedule required him to be absent from his place of abode for up to eight days at a time. Accordingly, he spent little more than half his time in State A. His living arrangements in State A were short-term, informal arrangements with friends. From December 1999 through November 2000, he shared household maintenance duties in exchange for rent. He provided evidence of only one signed lease for lodging in State A, a ten-month lease, co-signed with two others in March 2001, just two months before he moved back to his home in Virginia.
Determination of domicile in this case is made more difficult because of the nature of the Taxpayer's occupation. In such circumstances, secondary lodging quarters are more frequent. The Department concedes that it is difficult to know whether an individual intends to return to Virginia. The individual has the burden of proving abandonment of his or her Virginia domicile and acquisition of a domicile elsewhere. If the information is inadequate to meet this burden, the Department will conclude that he or she intended to return to Virginia.
Based on the information provided, I find that the Taxpayer has not met his burden of proving that he abandoned his Virginia domicile in 1999 and simultaneously obtained a domicile in State A. There is no evidence of the Taxpayer's intent to secure a permanent place of abode in State A. Accordingly, I find that the Taxpayer is a domiciliary resident of Virginia for the 1999 and 2000 taxable years, and the assessments at issue are upheld.
The Code of Virginia sections, regulations and public documents cited are available on-line in the Tax Policy Library section of the Department's web site, located at www.policylibrary.tax.virginia.gov. If you have any questions regarding this determination, please contact ***** of the Department's Office of Policy and Administration, Appeals and Rulings, at *****.
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- Sincerely,
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Kenneth W. Thorson
Tax Commissioner
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AR/43529E
Rulings of the Tax Commissioner