March 5, 2025
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond 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, 2020.
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 2020 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. Based on the information provided, the Department determined that the Taxpayer was subject to Virginia income tax as a domiciliary resident of Virginia and issued an assessment. The Taxpayer appeals, contending he was not a resident of Virginia for the taxable year in question.
DETERMINATION
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 that person and the place to which that person intends to return even though they may be residing elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained their place of abode within Virginia. A Virginia domiciliary resident continues to be subject to Virginia taxation even if they work in another state or country. 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 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. See Cooper's Adm’r v. Commonwealth, 121 Va. 338, 347 (1917). The burden of proof that an individual has abandoned or failed to establish domicile in Virginia rests with the individual. See Title 23 of the Virginia Administrative Code (VAC) 10-110-30 B 3.
The determination of whether a change of domicile has occurred is highly dependent on the facts and circumstances of the individual case, and no single factor is dispositive. Factors to be considered include, but are not limited to, the following:
sites of real and tangible property, location of savings and checking accounts, motor vehicle registration and licensing, motor vehicle operator’s license, voter registration, membership in clubs and civic groups, place of business, profession or employment, charitable contributions, location of schools attended by children, length of time of residence, place of birth and marriage, residence of family, reason for abandoning or acquiring domicile, and, in the case of a minor or married person, domicile of parents, husband, or wife and/or children.
From January 2016 to July 2020, the Taxpayer lived and worked in ***** (State A). In September 2020, he moved to ***** (State B) for a job. Then, in December 2020, he moved to ***** (State C) to care for a family member. The Taxpayer was registered to vote in State A from 2017 to 2022. He also owned a vehicle that was registered in State A. In addition, he held a State A driver’s license from November 2017 until he surrendered it and obtained a State C license in March 2021. The Taxpayer currently resides in State C.
The Taxpayer retained some connections to Virginia. He owned a personal residence in Virginia from 1983 until 2022. While the Taxpayer was transitioning from State A to State B, he stayed two months at the Virginia residence. He also owned a vehicle that remained registered in Virginia. The Taxpayer explains that the vehicle remained in Virginia because it was inoperable but that it was later repaired and sold. Certain tax reporting documents such as W-2s were also sent to the Virginia address. In addition, it appears that the Taxpayer obtained a Virginia driver’s license at some time prior to the taxable year at issue. It is unclear, based on Virginia Department of Motor Vehicle (DMV) records, when exactly the Taxpayer surrendered the license. However, the Taxpayer does not currently possess one.
The Department acknowledges that a determination of a change in domicile is evidenced by a process in which no single factor is dispositive. The Taxpayer was living and working in State A from 2016 to July 2020 and in State B for most of the rest of 2020. He only returned to Virginia for a short time in 2020 while he was transitioning between State A and State B. Although the Taxpayer had several ongoing connections to Virginia, the Taxpayer established a number of connections successively in State A and State B that support his claim that he intended to change his domicile. In addition, he did not reestablish domicile in Virginia in 2020 because he only stayed in Virginia temporarily while transitioning to State B for a new employment opportunity. He also eventually sold the Virginia residence and has not resided full-time in Virginia for a number of consecutive years. Accordingly, the Department finds that the Taxpayer was not taxable as a domiciliary resident of Virginia for the 2020 taxable year. The assessment, therefore, will be abated.
The Code of Virginia section and regulation cited are available online at law.lis.virginia.gov. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at ***** or *****@tax.virginia.gov.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR 4944.Q