Tax Type
Individual Income Tax
Description
Residency; Second home in Virginia
Topic
Taxpayers' Remedies
Date Issued
03-19-1990
March 19, 1990
Re: Ruling Request/ Individual Income Tax
Dear*********************
This will reply to your letters dated January 9, 1990 and February 14, 1990 in which you ("taxpayer") request a ruling with respect to your Virginia filing requirements.
FACTS
The taxpayer, a single individual, has maintained a place of abode in Washington, DC continuously since 1966 until the present.
During 1985, the taxpayer registered to vote in Virginia. At that time, the taxpayer owned unimproved land in Virginia and rented a house in the state. The taxpayer spent most weekends and holidays in Virginia, but maintained a residence in the District of Columbia (DC) where he lived during the week and worked full-time as partner in a law firm. The taxpayer did not commute between Virginia and DC on a daily basis and had no income from Virginia sources.
However, the taxpayer voted in the November, 1985 Virginia state election and in 1986, purchased a house in Virginia. During 1988, the taxpayer was appointed to fill a vacancy on the town council of the town in which his house is located to serve for the remainder of the term of a resigning member.
It is the taxpayer's intent to become a full-time Virginia resident, eventually, upon his retirement from full-time law practice in DC.
A ruling is requested for years 1985 through 1988 on whether the taxpayer is required to file Virginia income tax returns.
RULING
For purposes of income taxation Va. Code §58.1-302 sets forth two classes of residents, (1) actual residents and (2) domiciliary residents. Domiciliary residents are those whose legal domicile is 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. As the taxpayer resided in Virginia for less than 183 days during the years in question, he would not be deemed an actual resident.
Va. Code §58.1-302 sets forth the factors to be used in determining one's domicile, i.e., 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, 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. A person's true intention must be determined with reference to all of the facts and circumstances of the particular case.
Analysis of the domicile issue has been offered in numerous Virginia cases. Talley v. Commonwealth, 127 Va. 516, 103 S.E. 612 (1920), State-Planters Bank v. Commonwealth, 174 Va. 289. 6 S.E. 2d 629 (1940), and Layton v. Pribble, 200 Va. 405, 105 S.E. 2d 864 (1958). Articulated in the foregoing cases is the legal principle that in order for one to change a legal domicile from one place to another, there must be (1) an 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 intent of the person, often being the question.
Based upon the information that you have supplied in your letters and questionnaire, it appears that you continue to actively maintain your domicile in DC. You have stated that all banking accounts are established there, all earned income has been derived from DC sources, with the exception of nominal fees that you are paid as a town council member in Virginia, your primary motor vehicle is registered in DC, and you hold an operator's license there. Therefore, while you may vote in Virginia, own a house in Virginia, join a church, be appointed or elected to a local office, and register and store a secondary motor vehicle within, the state, such actions by themselves or taken together, are not sufficient to demonstrate an intent to establish a domicile in Virginia.
As an individual who maintains a place of abode in Virginia for fewer than 183 days during the taxable year, and who is domiciled in a jurisdiction other than Virginia you are a nonresident and as such, are only required to file a return in Virginia if you have income from Virginia sources.
However, if in subsequent years, you maintain a place of abode in Virginia for more than 183 days. you will be subject to the Virginia individual income tax as an actual resident. In such case, you will be subject to Virginia income tax on your entire income. Since DC continues to be your state of domicile and Virginia practices reciprocity with DC for income tax purposes. to the extent that you are taxed on the same income by both DC and Virginia, DC should allow a credit against its tax for the amount of Virginia income tax paid. Conversely, if you establish a Virginia domicile, but remain an actual resident of DC, Virginia would generally allow a credit for income tax paid to DC.
I hope that the foregoing has answered your inquiries, however if you need any further information, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner