Document Number
17-44
Tax Type
Individual Income Tax
Description
Taxpayer remained taxable as a domiciliary resident of Virginia for the taxable year.
Topic
Residency
Records/Returns/Payments
Domicile
Date Issued
04-03-2017

April 3, 2017

Re:     § 58.1-1821 Application: Individual Income Tax

Dear *****:

This will reply to your letter in which you seek reconsideration of the Department's determination letter, issued as Public Document (P.D) 16-143 (6/27/2016) for the taxable year ended December 31, 2012.

FACTS

In P.D. 16-143, the Department determined that the Taxpayer had not presented sufficient evidence to overturn the assessment for the taxable year at issue.  The Department afforded the Taxpayer one final opportunity to respond to the Department's information request or file a Virginia individual income tax return.  In response, the Taxpayer submitted the information requested, contending that he was not a domiciliary resident of Virginia during the 2012 taxable 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 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.

In this case, the Taxpayer resided in Virginia from 1987 until 1994 while he was assigned to a military duty station in Virginia.  The Taxpayer purchased a personal residence and registered vehicles in Virginia, and the Taxpayer's children attended Virginia public schools.  In addition, the Taxpayer obtained a Virginia driver's license, which he held continuously until 2008.

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).

After 1994, the Taxpayer was subsequently transferred to duty stations in ***** (Country A) and the ***** (Country B).  It appears that the Taxpayer did not own or lease any personal residences in these locations, but the Taxpayer registered vehicles there.  Once the Taxpayer retired from the military in 2005, he continued to live in foreign countries.  He states that he later began providing a family member's Virginia address for convenience purposes for receiving mail.  He also obtained a Virginia driver's license again in 2013 while he was in Virginia for several weeks visiting friends and family.

The Taxpayer continues to claim ***** (State A) as his residence from his period of military service.  The only connection with State A the Taxpayer retained was a State A voter's registration, but he has not provided any information about when it was obtained or last used to vote in an election.  In addition, the Department requested further information from the Taxpayer regarding his foreign residency and activities after 2005, but a response was not received.

Ultimately, a person can have only one domicile.  If he has two or more places of abode, his domicile is the one which he regards and uses as his permanent home.  See Title 23 Virginia Administrative Code (VAC) 10-110-30 B 3.  In this case, the Taxpayer has not provided sufficient information indicating any particular state or foreign country was his domicile.  In addition, the Taxpayer's retained connections with Virginia, including his retention of a Virginia driver's license for most of the period he claims to have resided overseas and the fact that he received mail at the Virginia address of a family member, indicates that he still considers Virginia to be his permanent home over any other state or foreign country.

Accordingly, I find that the Taxpayer remained taxable as a domiciliary resident of Virginia for the 2012 taxable year.  The Department's assessment was based on the information available.  The Taxpayer, however, may have additional information to more accurately reflect his Virginia income tax liability.  As such, the Taxpayer may file a 2012 Virginia resident individual income tax return.  The return should be mailed to: Virginia Department of Taxation, P.O. Box 27203, Richmond, Virginia 23261-7203, Attention: *****, within 30 days from the date of this letter.  Once the return is received, it will be processed and the assessment adjusted accordingly.  If the return is not filed within the time allotted, the assessment will be upheld and collection actions may result.

The Code of Virginia sections, regulation and public document cited are available on­line 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/768.M

Rulings of the Tax Commissioner

Last Updated 10/02/2017 07:20