May 6, 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 income tax return for the 2012 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 to determine if his income was subject to Virginia individual income tax. When the Taxpayer did not respond to the information request, the Department issued an assessment. The Taxpayer appeals, contending he was not a resident of Virginia or any other state.
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 Department must conclude that he or she intended to remain indefinitely in Virginia.
The Taxpayer claims he lived and worked in Virginia from 1999 to 2001 and in ***** (State A) from 2001 to 2006. The Taxpayer states that he has not had a permanent residence since he retired and left State A in 2006. He states that he began spending about half of each year in ***** (State B), but sometimes he was in ***** (State C). He also spent approximately 120 days in Virginia in 2012.
Several of the Taxpayer's family members lived in Virginia. He received mail at one of their residences and used that address when he filed his 2012 federal income tax return. The Taxpayer also obtained a Virginia driver's license in 2009 using a Virginia address.
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).
The Taxpayer states that he only obtained the Virginia driver's license in order to have an identification card. In arguing that he should not be taxable as a domiciliary resident of Virginia, he emphasizes his lack of connections to Virginia, such as vehicle registrations, real or tangible personal property or a voter's registration. The Taxpayer, however, does not appear to have had such connections with any other state either.
A taxpayer may have only one domicile at a time. If a taxpayer has two or more places of abode, then his domicile is the one which he regards and uses as his permanent home. See Title 23 of the Virginia Administrative Code (VAC) 10-110-30 B 3. In this case, the Taxpayer spent time in several different states, including Virginia. The Taxpayer received mail at his family member's Virginia residence, filed his 2012 federal income tax return using that address and obtained a Virginia driver's license in 2009. Such connections indicate an intent to regard Virginia as a permanent home. The Taxpayer has not provided any evidence that he regarded another state as his domicile. As such, I find that the Taxpayer was taxable as a domiciliary resident of Virginia for the 2012 taxable year. Accordingly, the Department's assessment is upheld.
The Code of Virginia sections, regulation 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