Tax Type
Individual Income Tax
Description
Taxpayer was a domiciliary resident of Country A during the taxable year
Topic
Domicile
Records/Returns/Payments
Date Issued
09-17-2010
September 17, 2010
Re: § 58.1-1821 Appeal: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of the individual income tax assessment issued to ***** (the "Taxpayer"), for the taxable year ended December 31, 2006.
FACTS
The Department received information from the Internal Revenue Service that tax documents for the 2006 taxable year were sent to the Taxpayer at a Virginia address. Additional investigation indicated the Taxpayer maintained a Virginia driver's license and was also registered to vote in Virginia. The Department requested additional information from the Taxpayer in order to determine his residence for the tax year in question. Based on the information provided, the Department concluded that the Taxpayer was a domiciliary resident of Virginia and issued an assessment for the 2006 taxable year. The Taxpayer appeals the assessment, contending he was a resident of ***** (Country A) during 2006.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Code § 58.1-302. The domiciliary residence of a person means that the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. For a person to change domiciliary residency to another state, that person must intend to abandon his Virginia domicile with no intention of returning to Virginia. Concurrently, that person 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 a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. A Virginia domiciliary resident, therefore, working in other parts of the country or the world who has not abandoned his Virginia residency continues to be subject to Virginia taxation. Additionally, a person 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.
In order to change from one legal domicile to another legal domicile, there must be (1) actual abandonment of the old domicile, coupled with an intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and an intent to remain there permanently or indefinitely. The burden of proving that the domicile has been changed lies with the person alleging the change.
In determining domicile, consideration may be given to the 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 the person's domicile. A person'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 residency or domicile.
The Department determines a taxpayer's intent through the information provided. The Taxpayer has the burden of proving that he or she has abandoned his or her Virginia domicile. If the information is inadequate to meet his or her burden, the Commissioner must conclude that he or she intended to remain indefinitely in Virginia.
The Taxpayer has performed a number of activities consistent with establishing domicile outside Virginia. The Taxpayer resided in ***** (State A) when he accepted employment from an international organization and moved to Country A in late 1994. The international organization has certified that he has been on staff since 1995 and is presently stationed in Country A. The Taxpayer indicates he resided in Country A from 1995 through 2009, returning for several weeks a year to satisfy federal requirements for overseas residents of the United States. The evidence shows he had been employed under an indefinite contract, established a permanent place of abode, and obtained a driver's license in Country A.
The Taxpayer also established several connections with Virginia that would indicate an intent to establish domicile in Virginia. He received mail at a Virginia address, obtained and renewed a Virginia driver's license, and registered to vote in Virginia. The Taxpayer states the Virginia address was the home of his parents, and it was used only to receive mail due to the unreliability of mail service outside the United States. In addition, the Taxpayer states he obtained a Virginia driver's license because he was unable to return to State A to renew his license in that state. He further states that he registered to vote only for the purpose of federal elections.
Virginia Code § 46.2-323.1 states, "No driver's license . . . shall be issued to any person who is not a Virginia resident." Every person applying for a driver's license must execute and furnish to the Commissioner of the Department of Motor Vehicles a statement that certifies the applicant is a Virginia resident. Virginia Code § 46.2-323.1 states, "No driver's license . . . shall be issued to any person who is not a Virginia resident." In fact, this section goes on to state that every person applying for a driver's license must execute and furnish to the Department of Motor Vehicles (DMV) a statement which certifies that the applicant is a Virginia resident. Further, the Department has found that obtaining or renewing a Virginia driver's license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/09/2002).
With regard to voting in Virginia, an individual qualified to vote in Virginia must be a resident of the precinct in which he offers to vote. See Va. Code § 24.2-101. This statute also requires a resident to have both domicile and a place of abode in Virginia. For Virginia voting purposes, domicile is determined by the intention of the individual, supported by an individual's factual circumstances. See State Board of Elections (SBE) Policy 2009-005.
Federal law, however, requires states to establish procedures in order to permit absentee voting in federal elections for certain overseas voters. See 42 U.S.C. § 1973ff-1. Under 42 U.S.C. § 1973ff-6(5), an overseas voter must be permitted to vote in the last place in which such individual was domiciled before leaving the United States. To comply with federal law, the Virginia Board of Elections (VBE) has established procedures allowing overseas voters to be eligible for a temporary voter registration in order to vote in elections.
The Department considers an individual's voter registration along with such individual's expressed intent, conduct, and other attendant circumstances in making a determination as to whether such individual is a domiciliary resident of Virginia. While a Virginia voter registration would be considered an indication of intent to establish or retain domicile in Virginia, a temporary voter registration issued by the VBE could show an intent to reside outside Virginia.
The Taxpayer indicates that he has only voted in federal elections. However, the Taxpayer asserts that he was not a domiciliary resident of Virginia when he moved overseas. As such, it does not appear that he would qualify as an overseas voter in Virginia. By registering to vote in Virginia, the Taxpayer has either expressed an intent to obtain a Virginia domicile or made a false statement to an agency of the Commonwealth.
After reviewing all the evidence in this case, it is my determination that the Taxpayer was a domiciliary resident of Country A during the 2006 taxable year. While the Taxpayer did take steps indicative of establishing domicile in Virginia, he clearly retained his domicile in Country A during the 2006 taxable year. Accordingly, the assessment for the 2006 taxable year has been abated.
While the Department concedes the Taxpayer's Country A residency for the taxable year at issue, the Taxpayer should be aware that continuing connections with Virginia, such as possession of a Virginia driver's license, using a Virginia address for primary financial documents, registering to vote or other indicators of a permanent residence in Virginia, will likely continue to result in future contacts by the Department with respect to the situs of the Taxpayer's domicile. As in any determination, a change in the facts and circumstances could result in a change in the Department's determination in subsequent taxable years.
In addition, the Taxpayer should contact DMV in order to clarify his eligibility to hold a Virginia driver's license. He should also contact VBE concerning his eligibility to vote in Virginia elections.
The Code of Virginia and regulation sections cited, along with other reference documents, are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have questions concerning this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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Craig M. Burns
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- Acting Tax Commissioner
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AR/1-4299021773.o
Rulings of the Tax Commissioner