Tax Type
Individual Income Tax
Description
Taxpayer successfully abandoned his Virginia domicile and established domicile in State A
Topic
Domicile
Federal Conformity
Persons Subject to Tax
Date Issued
10-10-2013
October 10, 2013
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek correction of the Virginia individual income tax assessment issued to ***** (the "Taxpayer"), for the taxable year ended December 31, 2010.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2010 taxable year. A review of the Department's records showed that the Taxpayer had not filed a return. The Department requested additional information from the Taxpayer in order to determine if his income was taxable in Virginia. Under audit, the Department determined that the Taxpayer was a domiciliary resident of Virginia in 2010 and issued an assessment. The Taxpayer appeals, contending he was a resident of ***** (State A) during the 2010 taxable year.
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 reside elsewhere. For a person to change domiciliary residency to another state or country, 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 in another country 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, situs of real or 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 the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.
The Department determines a taxpayer's intent through the information provided. A taxpayer has the burden of proving that he or she abandoned his or her Virginia domicile. If the information is inadequate to meet this burden, the Tax Commissioner must conclude that he or she intended to remain indefinitely in Virginia.
The Taxpayer performed a number of actions to establish domicile in State A. He moved from Virginia to State A in 2009 to accept an employment opportunity. The evidence indicates this was a permanent position of indefinite duration. He established a permanent place of abode in State A. He surrendered his Virginia driver's license and obtained a State A license. The Taxpayer also registered to vote and registered a motor vehicle in State A.
The Taxpayer, however, maintained some connections with Virginia. He continued to own a home in Virginia in which his wife lived. He also continued to own other motor vehicles registered in Virginia.
The Taxpayer asserts that his wife intended to move to State A, but she developed an illness that required her to remain in Virginia. The Taxpayer has provided documentation from the wife's physician attesting to her treatment in Virginia. In 2011, the Taxpayer returned to Virginia because of his wife's condition and his own health problems, and he filed his Virginia return for that taxable year as a part-year resident consistent with having reestablished his Virginia domicile.
The Department acknowledges that a change of domicile occurs as part of a process in which no single factor is dispositive. After carefully weighing all the evidence, I find that the Taxpayer successfully abandoned his Virginia domicile and established domicile in State A in 2009. Further, he did not reestablish his Virginia domicile until 2011. As such, the Taxpayer was not a resident of Virginia for the 2010 taxable year and was not required to file a Virginia income tax return. Accordingly, the assessment issued to the Taxpayer for the 2010 taxable year will be abated.
The Code of Virginia section cited is available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions 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/1-5400149764.M
Rulings of the Tax Commissioner