March 18, 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, 2014.
FACTS
The Taxpayer filed a 2014 Virginia resident income tax return. The Department issued an assessment for the balance reported on the return. The Taxpayer appeals the assessment, contending that he lived and worked in ***** (State A) for the entire 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 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 Taxpayer appears to have engaged in a number of activities indicating an intent to establish domicile in State A. He states that he moved to State A from ***** (State B) in February 2014. He has provided a copy of a lease agreement for a property located in State A, and a copy of a State A driver's license as proof that he resided in State A during the 2014 taxable year. The driver's license copy was illegible.
The Taxpayer, however, performed several steps indicative of an establishing domicile in Virginia. While the Taxpayer asserts he did not own an automobile, Virginia Department of Motor Vehicles (DMV) records show, the Taxpayer maintained a motor vehicle in Virginia and has held a Virginia driver's license since November 2012. The license is set expire in January 2017. The Taxpayer's federal income tax return was filed using a Virginia address. The Taxpayer contends his mother resides in Virginia, and he uses her address to receive important documents.
In regard to the driver's 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. The Department has found that an individual may successfully establish a domicile outside Virginia even if he retains a Virginia driver's license. See Public Document (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). In Barbara B. Woods v. Commonwealth, Case No. L 97-422 (March 30, 2002), published as P.D. 03-47 (1/1/2003), the Circuit Court of Wise County indicated the plaintiffs Virginia driver's license was an important connection in establishing a positive or presumptive proof of intention to remain in Virginia for an unlimited time.
As stated above, the burden of proving a change of domicile remains with the Taxpayer. Based on the information provided, the Department finds the Taxpayer has failed to provide sufficient evidence that he was not a domiciliary resident of Virginia during the taxable year at issue.
I will allow the Taxpayer one final opportunity to provide adequate documentation with regard to his domiciliary status in State A. The documentation should be submitted within 30 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *****. If the documentation is not received within the allotted time, the assessment will be considered to be correct as issued and collection actions may result.
The Code of Virginia sections, and public documents cited are 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/1-6128805876.D