Document Number
12-165
Tax Type
Individual Income Tax
Description
Taxpayer an actual resident of State A, did not abandon his Virginia domicile
Topic
Domicile
Federal Conformity
Persons Subject to Tax
Date Issued
10-23-2012

October 23, 2012




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 assessment issued to ***** (the "Taxpayer") for the taxable years ended December 31, 2006 and 2007.

FACTS


The Department received information from the Internal Revenue Service that tax documents for the 2006 and 2007 taxable years were sent to the Taxpayer at a Virginia address. The Department requested additional information from the Taxpayer to determine if the Taxpayer's income was subject to Virginia individual income tax. When the Taxpayer did not respond to the information requests, the Department issued assessments for the years at issue. The Taxpayer appeals the assessment, contending he was a resident of ***** (State A) and did not have any income from Virginia sources for the taxable years at issue.

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 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 another country who has not abandoned his Virginia residency continues to be subject to Virginia taxation.

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 domicile. The Department determines a taxpayer's intent through the information provided.

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.

While the Taxpayer maintained a permanent place of abode and worked in State A, he also maintained a Virginia residence. The Taxpayer returned to his residence regularly and received financial documents at this residence. He also held a Virginia driver's license that was renewed in June 2007 and again in April 2012. The Taxpayer also had multiple vehicles registered in Virginia.

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. A person providing a false statement is subject to punishment under the laws of the Commonwealth. The Department has found that an individual may successfully establish a domicile outside Virginia even if they retain a Virginia driver's license. See Public Document (P.D.) 00­151 (8/18/2000). However, 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).

Based on all the facts presented, the Taxpayer appears to have been an actual resident of State A. However, he did not abandon his Virginia domicile. Accordingly, the Taxpayer was required to file a Virginia income tax return.

Virginia Code § 58.1-332 provides Virginia residents a credit on their Virginia return for income taxes paid to another state, provided the income is either earned or business income or gain on the sale of a capital asset. The Taxpayer provided official transcripts of his State A income tax return for both years at issue. According to the transcripts, the Taxpayer reported no State A tax liability. Absent of such liability, the Taxpayer does not qualify for the other state's tax credit under Va. Code § 58.1-332.

Based on the foregoing, the assessment is upheld. An updated bill, with interest accrued to date, will be mailed to the Taxpayer shortly. No further interest will accrue provided the outstanding balance is paid within 30 days from the date indicated of the revised bill.

The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
                • Sincerely,


                • Craig M. Burns
                  Tax Commissioner



AR/1-5018308112.D


Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46