Document Number
Tax Type
Individual Income Tax
Domicile, Residency
Date Issued

September 19, 2017

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 years ended December 31, 2013 and 2014.


The Taxpayer, a domiciliary resident of Virginia, was assigned by his employer to work in ***** (Country A) during 2013 and 2014.  He filed nonresident Virginia income tax returns for those years.  Under review, the Department adjusted the Taxpayer's returns as if he was a domiciliary resident of Virginia and issued assessments.  The Taxpayer appeals the assessments, contending he was not a resident of Virginia during the taxable years at issue.


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 indicates he was assigned to Country A for an indefinite amount of time and did not know where he would reside upon the end of his assignment, but he has provided no objective evidence to support his assertions.  In addition, the Department finds it unlikely that any employer would assign an employee to a “war time environment” permanently or indefinitely.

Further, in considering employment as it relates to an individual's domicile, the Department has analyzed whether a specific employment contract was established permanently or for an indefinite period of time.  See Public Document (P.D.) 99-158 (6/21/1999).  In the case of individuals who engage in employment under set term contracts, the Department has ruled that such individuals generally lack the intent to abandon their Virginia domicile based on the temporary nature of the activity.  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). In P.D. 01-161 (10/23/2001), the Department held, however, that a taxpayer that takes sufficient actions to abandon his Virginia domicile can be considered to have established a new domicile even though he was temporarily employed for a definite period of time.

The Taxpayer had, however, maintained significant connections with Virginia.  He kept his Virginia residence while working in Country A.  The Taxpayer's 2013 and 2014 tax returns indicate he claimed a deduction on the Virginia house as his principal or second home. See Internal Revenue Code (IRC) § 163(h)(4)(A).  In addition, it does not appear the Taxpayer had any kind of rental agreement with his former spouse and the house was available for him to move back into when he returned to Virginia.  In fact, the Taxpayer states that he allowed his former spouse to reside in the residence while he lived in Country A.  The Taxpayer moved back into his Virginia residence upon his return to the United States.  He also filed a part-year Virginia income tax return for 2015 showing he moved back to Virginia in August of that year.

The Taxpayer also retained his Virginia driver's license and automobile registration for two vehicles.  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 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 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 indicates that he retained his Virginia license because he was not legally permitted to drive in Country A. The fact is, however, that the Taxpayer returned to Virginia in 2015 and had his driver's license available for use.

The Taxpayer states that he allowed his former spouse to use one of his vehicles and that the other one was in poor condition and not used during 2013 and 2014. Again, the vehicles were available for him upon his return.

The Taxpayer retained ties to Virginia by keeping his residence, maintaining his Virginia driver's license and vehicle registrations.  In addition, he returned to the same residence in Virginia upon the conclusion of his work in Country A.  Although the Taxpayer may have been assigned to a foreign country indefinitely and allowed his former spouse to reside in his place of abode and use his vehicle, his continued connections to Virginia raised doubts as to whether the Taxpayer intended to move to Country A permanently and indefinitely.

Once established, an individual's domicile does not necessarily require physical presence in order to be maintained.  While the Taxpayer may not have been physically located in Virginia during the taxable years at issue, he maintained a number of the types of connections with Virginia indicative of an individual who intended to return to Virginia even though he resided elsewhere.  Coupled with the fact the Taxpayer has shown no evidence he intended to establish domicile in Country A, the Department finds that, the Taxpayer did not abandon his Virginia domicile while living in Country A. Accordingly, the Taxpayer's request for the abatement of the assessments of Virginia income tax for the taxable years ended December 31, 2013 and 2014 is denied.

The Code of Virginia sections and public documents cited are available on-line at 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 *****.



Craig M. Burns
Tax Commissioner



Last Updated 10/03/2017 12:11