Document Number
18-185
Tax Type
Individual Income Tax
Description
Residency, Domicile and Taxpayer Established in Virginia
Topic
Appeals
Date Issued
10-30-2018

 

October 30, 2018

 

 

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.  I apologize for the delay in responding to your appeal.

 

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 2014 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 in order to determine if his income was taxable in Virginia.  In response, the Taxpayer claimed he was a resident of ***** (State A).  The Department, however, concluded that the Taxpayer was taxable as a domiciliary resident of Virginia and an assessment was issued.  The Taxpayer appealed, contending he was a resident of State A.

 

DETERMINATION

 

Residency

 

Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia 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.

 

Based on information provided by the Taxpayer, he spent 161 days in Virginia in 2014.  Therefore, he was not an actual resident of Virginia during the 2014 taxable year.  The remaining question is whether he was a domiciliary resident of Virginia.

 

Domicile

 

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 has 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.

 

Few factors support the Taxpayer’s position that he was a domiciliary resident of State A.  While he and his spouse owned a personal residence in State A, the Taxpayer resided there only while he was not occupied with his employment duties in Virginia.  The spouse resided at that residence.  The Taxpayer and his spouse also owned one vehicle that was registered in State A, which was primarily used by the spouse.  In addition, the Taxpayer states that all of his banking was done with State A institutions and he maintained his insurance license with State A.  The Taxpayer and his spouse were also filing joint State A resident tax returns.

 

The Taxpayer maintained numerous connections with Virginia.  The Taxpayer was employed in a permanent, full-time position at a Virginia public university, in a position he had occupied for more than twenty years.  He owned a personal residence in Virginia and had a number of financial documents such as bank and credit card statements and tax information returns sent to that address.  The Taxpayer also registered to vote in Virginia, and regularly participated in state and local elections. Further, he registered two vehicles in Virginia and held a Virginia 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).

 

With regard to eligibility to vote, Article II, Section 1 of the Constitution of Virginia states in relevant part as follows:

 

In elections by the people, the qualifications of voters shall be as follows: Each voter shall be a citizen of the United States, shall be eighteen years of age, shall fulfill the residency requirements set forth in this section, and shall be registered to vote pursuant to this article.

 

The residence requirements shall be that each voters shall be a resident of the Commonwealth and of the precinct in which he votes.  Residence, for all purposes of qualification to vote, requires both domicile and place of abode.

 

The domicile and place of abode requirement found in the Constitution of Virginia is also reflected in the definition of “residence” or “resident” used in Virginia election statutes. See Virginia Code § 24.2-101.  Consistent with the precedent established by the Virginia Supreme Court in Coopers Adm’r v. Commonwealth, 121 Va. 338, 93 S.E. 680 (1917), the Department will consider the fact that a taxpayer obtained a Virginia voter’s registration and voted in elections in Virginia to be very strong evidence that that individual considered Virginia to be his domicile during the time he held and used such registrations.

 

The Department acknowledges that a change of domicile occurs as part of a process in which no single factor is dispositive.  After carefully considering all of the evidence presented, I find that the Taxpayer was taxable as a domiciliary resident of Virginia for the 2014 taxable year.

 

The assessment was made based on the best information available to the Department pursuant to Virginia Code § 58.1- 111.  The Taxpayer may have information that better represents his Virginia income tax liability for the taxable year at issue. Therefore, he should file a 2014 Virginia resident income tax return to more accurately reflect his Virginia tax liability.  The Taxpayer may file the return jointly with his spouse or separately.  If a joint return is filed, however, the Taxpayer and his spouse’s income must be determined as if both were Virginia residents.  See Virginia Code § 58.1-326.

 

The return 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: *****.  Upon receipt, the return will be processed and the assessment will be adjusted accordingly.  If the return is not received within the allotted time, the assessment will be considered to be correct.

 

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 about this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.

 

Sincerely,

 

Craig M. Burns
Tax Commissioner

 

AR/1519.A

 

 

 

Rulings of the Tax Commissioner

Last Updated 11/15/2018 09:08