Tax Type
Individual Income Tax
Description
Residency; Abandonment of Virginia domicile
Topic
Residency
Date Issued
02-27-1987
February 27, 1987
Re: Virginia Code §58.1-1821 Application
Individual Income Tax
Dear ************************
This is in reply to your letters of April 23, 1986 and May 7, 1986 in which you make application for correction of the individual income tax assessments issued to your clients, *********** (Taxpayers), for taxable years 1980, 1981, 1982 and 1983.
FACTS
************* (Husband) is a federal civil service employee of the**************. During his 30 years as a federal civil service employee he and his wife have lived in 17 different homes, 7 states within the United States and in 2 different government installations in foreign countries. During this time he has only been assigned to only one location for over four years.
In 1979, while on assignment in Panama, he desired to be assigned to Saudia Arabia. In order to facilitate his chances of being assigned to Saudia Arabia he applied for and was selected for employment in Winchester, Virginia. In June, 1979 the Taxpayers moved to Virginia and purchased a house. on April 22, 1980 the Husband was notified that on April 30, 1980 his employment would be discontinued in Virginia. He then applied for and was selected for employment in Saudia Arabia on May 22, 1980.
After being assigned to Saudia Arabia, the Taxpayers attempted to sell their house in Virginia. However, because of unfavorable market conditions, the house remained unsold. Eventually, the Taxpayers were able to rent the house briefly, at a monthly rate that was less than their mortgage payment. In 1982 the Husband requested and was granted an additional two year assignment in Saudia Arabia. In 1984 he again requested an additional two year assignment in Saudia Arabia. This time because of a phase down of operations in Saudia Arabia his request was denied. He was transferred to his previous location in Virginia in May, 1984 and has remained in Virginia since that time.
After contact with the Department of Taxation and completion of a Virginia "Domicile Questionnaire", the Taxpayers' part year resident individual income tax return, which they filed for tax year 1980, was adjusted and an assessment was issued. This action was taken by the department on the grounds that the Taxpayers had not abandoned their Virginia domicile in 1980 when they moved to Saudia Arabia and that they continued to be domiciliary residents of Virginia for the period of time that they resided in Saudia Arabia. It is this position of the department as it relates to the Taxpayers and the resulting assessments that you seek to have corrected.
DETERMINATION
Domicile, for Virginia income tax purposes is defined under Virginia Code §58.1-302 accordingly:
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- "Domicile" means the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. In determining domicile, consideration may be given to the applicant's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, business pursuits, employment, income sources, residence for federal income tax purposes, marital status, residence of parents, spouse and children, if any, leasehold, sites of personal and real property owned by the applicant, motor vehicle and other personal property registration, residence for purposes of voting as proven by registration to vote, if any, and such other factors as may reasonably be deemed necessary to determine the person's domicile. (Emphasis added.)
- "Domicile" means the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. In determining domicile, consideration may be given to the applicant's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, business pursuits, employment, income sources, residence for federal income tax purposes, marital status, residence of parents, spouse and children, if any, leasehold, sites of personal and real property owned by the applicant, motor vehicle and other personal property registration, residence for purposes of voting as proven by registration to vote, if any, and such other factors as may reasonably be deemed necessary to determine the person's domicile. (Emphasis added.)
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- Any person who, on or before the last day of the taxable year, changes his place of abode to a place without the Commonwealth with the bona fide intention of continuing actually to abide permanently without Virginia shall be taxable as a resident for only that portion of the taxable year during which he was a resident of Virginia ... (Emphasis added.)
It is not only the act of "abiding without Virginia" that is necessary to demonstrate the abandonment of a Virginia domicile. This action must be in conjunction with the intention of making this a permanent change. That is why each determination of domicile must be based upon the facts as they relate to the items enumerated in Virginia Code §58.1-302 (set out above).
Based upon the facts as presented, it appears that the Taxpayers fulfilled the necessary requirements for the abandonment of their Virginia domicile at the time that they moved to Saudia Arabia. They changed their abode to a place without Virginia and they had the intention to permanently reside without Virginia. Therefore, the individual income tax assessments for taxable years 1980, 1981, 1982 and 1983 will be abated in full.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner