July 28, 2016
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 year ended December 31, 2012.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia individual income tax return for the 2012 taxable year. The Department requested information to verify whether the Taxpayer was subject to Virginia income tax. When a response was not received, the Department issued an assessment. The Taxpayer filed an appeal, contending she lived and worked in ***** (State A) in 2012.
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.
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.
The Department determines a taxpayer's intent through the information provided. A taxpayer has the burden of proving that he or she has 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.
Between 2007 and 2011, the Taxpayer conducted a number of activities indicative of establishing a domiciliary presence in Virginia. She established a permanent place of abode, filed Virginia tax returns, registered a motor vehicle and obtained a Virginia driver's license.
The Taxpayer also took actions consistent with establishing domicile in State A beginning in 2012. The Taxpayer was employed by a State A business in 2012 and established a permanent place of abode. She also surrendered her Virginia driver's license for a State A license in 2014.
In addition, she provided a copy of a nonimmigrant worker permit issued by the United States Citizenship and Immigration Services. The permit was issued at the request of the Taxpayer's State A employer and allows the Taxpayer to reside in the United States at the request of the employer. The permit specifies the individual can only work for the petitioning employer for an authorized period of time.
The Department has repeatedly ruled that individuals generally lack the intent to abandon their Virginia domicile when they engage in temporary employment outside the Commonwealth. See P.D. 86-219 (11/3/1986), P.D. 94-353 (11/23/1994), P.D. 96-207 (8/26/1996), P.D. 02-33 (3/13/2002), P.D. 05-8 (2/1/2005), P.D. 10-134 (7/12/2010) and P.D. 15-142 (6/30/2015). Conversely the same would be true for nonresidents and foreign nationals who work in Virginia for a fixed duration. It appears the Taxpayer was working in Virginia under similar permits petitioned by Virginia employers.
In P.D. 16-11 (2/29/2016), the Department confirmed that an individual may not rely on the fact that they are a foreign national working temporarily in the United States to avoid Virginia taxation. As with all domicile cases, all of the attendant facts and circumstances must be examined to determine if a change has occurred.
The Department acknowledges that a change in domicile occurs as part of a process in which no single factor is dispositive. In the Taxpayer's case, even if we were to assume that the Taxpayer established domicile in Virginia, the Department finds that the information provided demonstrates that the Taxpayer abandoned her Virginia domicile when she moved to State A to begin employment with the State A employer. Accordingly, the 2012 assessment 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/1-6230711423.D