April 21, 2015
Re: Request for Ruling: Individual Income Tax
Dear *****:
This will reply to your letter in which you request a ruling with respect to the residency of ***** (the “Taxpayers”).
The Taxpayers were domiciliary residents of Virginia at the beginning of the 2011 taxable year. In November 2010, the husband had accepted employment in ***** (State A). In January 2011, the Taxpayers purchased a residence in State A, and the husband moved there and began working in February 2011. After remaining in Virginia for a short time, the wife moved to State A in March 2011. In April 2011, they registered vehicles and registered to vote in State A, and the wife indicates that she obtained a State A driver's license. The husband also obtained a State A driver's license in September 2011. Subsequently, the husband decided to end his employment in State A, and the Taxpayers returned to Virginia in November 2011.
The Taxpayers filed a part-year Virginia resident return for the 2011 taxable year. They request a ruling concerning their status as residents for that year.
RULING
Residency
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.
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 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.
Under Title 23 of the Virginia Administrative Code (VAC) 10-110-30, moving outside of Virginia and then returning within six months constitutes prima facie evidence that an individual did not intend to abandon his Virginia domicile. The application of this regulation depends on the length of time the individual has been physically present in another state, not whether he obtained a driver's license or performed any other specific action there. Further, even if the individual returns to Virginia within six months, the presumption that he did not intend to abandon his Virginia domicile can be rebutted by other evidence.
The Taxpayers performed a number of actions indicating an intent to establish domicile in State A. After the husband accepted employment in State A, the Taxpayers sold their Virginia residence and purchased a residence there. They also moved and registered motor vehicles, registered to vote and obtained State A driver's licenses.
One factor that may indicate the wife intended to remain a domiciliary resident of Virginia, however, was that she retained her Virginia's driver's license, despite the fact that
she had also obtained a ***** license. 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 states that every person applying for a driver's license must execute and furnish to the Commissioner of the Department of Motor Vehicles (DMV) a statement that certifies that the applicant is a Virginia resident. Further, any applicant who knowingly makes a false statement to DMV is subject to penalties under Va. Code § 46.2-348. The Department has found that an individual may successfully establish a domicile outside Virginia even if he retains a Virginia driver's license. See P.D. 00-151 (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 (12/9/2002).
As indicated above, motor vehicle licensing is one factor to consider among others. The Department has acknowledged that a change in domicile occurs as part of a process in which no single factor is dispositive. See P.D. 05-91 (6/9/2005), P.D. 09-86 (5/28/2009), P.D. 10-180 (8/16/2010), P.D. 13-115 (6/26/2013), and P.D. 14-141 (8/13/2014). Based on established policy, the short period of time they lived in State A, and the fact the Taxpayers took all other steps to abandon their Virginia domicile, they have satisfied the burden of showing they intended to abandon their Virginia domicile in 2011.
Based on the information provided, the Department finds that the husband successfully changed his domicile to State A in February 2011. In addition, the Department also finds that the wife successfully changed her domicile to State A in March 2011. They established their Virginia domiciles again when they returned in November 2011.
Filing Requirements
The Taxpayers have already filed a joint part-year return for the 2011 taxable year. The Taxpayers should ensure that the return covers both periods of the year during which they were domiciliary residents of Virginia. The Taxpayers should also be aware that, because they filed a joint return, the husband, who was a nonresident beginning in February 2011, would also be subject to Virginia income tax for the period his wife remained a Virginia resident until March 2011. See Title 23 VAC 10-110-190.
This ruling is based on the facts presented as summarized above. Any change in facts or the introduction of new facts may lead to a different result.
The Code of Virginia sections, regulations, and public documents cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's web site. If you have any questions regarding this ruling, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1-5876190866.M