Tax Type
Individual Income Tax
Description
Military personnel
Topic
Residency
Date Issued
06-02-1987
June 2, 1987
Re: Ruling Request / Domicile
Individual Income Tax
Dear **********************
This is in reply to your letter of March 9, 1987 in which you request a ruling regarding the effect, on your domicile for Virginia income tax purposes, of purchasing a house in Virginia.
FACTS
Your husband is Foreign Service officer employed with the United States Department of State. He was born in California and was a resident of California at the time that he joined the Foreign Service. You have been a California resident since 1976 and are not currently employed as a Foreign Service Officer. You both maintain that California is your true domicile, and in support of this contention you state that you both have voted in California, hold California drivers licenses and plan to retire to California upon your husband's retirement from the Foreign Service.
As is customary with Foreign Service employees, much of your husband's time is spent on assignment outside of the United States. In the past you have always traveled with your husband on his overseas assignments and in the foreseeable future you plan to continue to travel with him. Periodically you return to the Washington, D. C. area between foreign assignments. In contemplation of purchasing a home in Virginia for use during these periodic temporary assignments in Washington, you have asked the following questions:
1. Can we retain our domicile in California if we buy a home in Virginia because of the special circumstances surrounding my husband's employment with the Foreign Service and the limited amount of time we would actually spend in Virginia?
2. If you rule that we can retain our domicile, can you confirm that we would then continue to pay California tax rather than Virginia taxes?
RULING
For purposes of income taxation there are two classes of residents in Virginia, (1) domiciliary residents and (2) actual residents. Domiciliary residents are those whose legal domicile is Virginia. Any person who is a domiciliary resident, who has not moved from Virginia with the intention of permanently residing outside of Virginia, is still a domiciliary resident even though he may be actually living somewhere else. Conversely, any person who is a domiciliary resident of another state, who has not moved to Virginia with the intention of permanently residing within Virginia, is still a domiciliary resident of that other state even though he may be actually residing in Virginia.
An actual resident is any individual who is not domiciled in this State, but who actually maintains a place of abode in Virginia for more than 183 days during the taxable year. An individual may remain an actual resident of Virginia until such time that he demonstrates the intent and actions necessary to establish his domicile in Virginia. A person's true intention must be determined with reference to all of the facts and circumstances of the particular case.
Based upon the information that you have supplied in your letter, it appears that as long as you and your husband continue to actively maintain your California domicile and take no overt steps to establish a domicile in Virginia, other than to purchase a house in Virginia, such purchase by itself, is not sufficient to demonstrate an intent to establish a domicile in Virginia.
However, if either or both you and your husband maintain a place of abode in Virginia for more than 183 days, such individual will be subject to the Virginia individual income tax as an actual resident. In such case, that individual will be subject to Virginia income tax on his entire income. Since California continues to be your state of domicile and Virginia practices reciprocity with California for income tax purposes, to the extent that you and/or your husband are taxed on the same income by both California and Virginia, California should allow a credit against its tax for the amount of Virginia income tax paid.
In the event that you purchase a house in Virginia, which you rent while you are on overseas assignment, you may become subject to Virginia income tax as a nonresident.
If you have any further questions, please do not hesitate to contact this office.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner