Tax Type
Individual Income Tax
Description
Residency; Retired military
Topic
Residency
Taxpayers
Date Issued
08-25-2000
August 25, 2000
Re: § 58.1-1821 Application: Individual Income Tax
Dear ****
This will reply to your letter in which you protest the assessment made against ***** (the "Taxpayer") for the 1995 through 1997 taxable years.
FACTS
Pursuant to a review by the department, the Taxpayer was assessed for individual income taxes for the taxable years of 1995 through 1997. The department concluded that the Taxpayer was a domiciliary resident of Virginia for these years. The Taxpayer disputes the assessment and contends that he has never been a domiciliary resident of Virginia. Instead, he claims that he has always been a resident of a state other than Virginia ("State A").
The Taxpayer lived continuously in State A until he joined the United States military. The Taxpayer retired from the military in 1987. At this time, the Taxpayer was living in Virginia with his wife and children. Upon leaving the military, the Taxpayer accepted employment with an airline and was stationed in Washington D.C. The Taxpayer continued to live in Virginia until 1994 when the Taxpayer was stationed in State A by his airline employer. By this time, the Taxpayer had divorced from his wife. The Taxpayer moved to State A while his ex-wife and children remained in Virginia. The Taxpayer moved into a residence he owns jointly with his mother. The Taxpayer continues to live in this residence with his mother.
Upon review by the department, it was found that the Taxpayer still maintains a number of connections with Virginia. The Taxpayer has numerous vehicles registered in Virginia, real property in Virginia, a Virginia bank account, a Virginia driver's license, and wages reported to Virginia. Consequently, the Taxpayer was assessed individual income taxes for the 1995 through 1997 taxable years. The Taxpayer contends that he was not a domiciliary or actual resident of Virginia for the 1995 through 1997 taxable years, and that he has always been a domiciliary resident of State A.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. Domiciliary residence means the permanent place of residence of a taxpayer and/or the place to which he or she intends to return even though they may actually reside elsewhere. For an individual to change domiciliary residency to another state, that individual must intend to abandon their Virginia domicile with no intention of returning to Virginia. Concurrently, that individual 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 an individual who, for an aggregate of more than 183 days of the taxable year, maintained a place of abode within Virginia. A Virginia domiciliary resident, therefore, working in other parts of the country who has not abandoned his Virginia residency continues to be subject to Virginia taxation. Additionally, an individual 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 as a resident.
In determining domicile, consideration may be given to an 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, sites of real and tangible property, motor vehicle registration and licensing, and such other factors as may be reasonably deemed necessary to determine an individual's domicile. An individual's true intention must be determined with reference to all of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.
The department concedes that it is difficult to know whether an individual intends to return to Virginia. The individual has the burden of proving abandonment of his or her Virginia domicile. If the information is inadequate to meet this burden, the department will conclude that he or she intended to return to Virginia.
While the Taxpayer has numerous connections with Virginia that tend to lead to the conclusion that the Taxpayer is domiciled in Virginia, many of these can be reasonably explained by the fact that the Taxpayer's children reside in Virginia and are supported in part by the Taxpayer. During the years at issue, the automobiles that were registered to the Taxpayer in Virginia were used exclusively by his children. Likewise, the property the Taxpayer owns in Virginia was occupied by one of his children as a home while he attends college. The Taxpayer has an agreement in place for the sale of this property upon his son's graduation. The Virginia bank account is with a bank with branches available nationally. However, like the automobiles and the property, this bank account was not used by the Taxpayer but was used by his children for college money.
The Taxpayer has also provided evidence to explain the remaining connections with Virginia. The Taxpayer's employer incorrectly reported his wages to Virginia for the 1995 and 1996 taxable years. Also, the Taxpayer mistakenly obtained a Virginia driver's license in 1995 after receiving a traffic ticket in Virginia. Based on the information provided, it appears that the Taxpayer was not eligible to hold a Virginia driver's license.
The weight of the evidence in this case shows that the Taxpayer was neither an actual or domiciliary resident of Virginia during the taxable years of 1995 through 1997. While the Taxpayer did maintain connections to Virginia, the information provided reasonably explains these connections without creating domicile in Virginia. It is also clear from the information provided that the Taxpayer established a State A domicile when he was transferred by his employer.
Accordingly, the assessments for the taxable years of 1995 through 1997 have been abated. The department's records indicate that the Taxpayer's personal property tax refund for 1998 was withheld and applied to the assessments. The refund in the amount of $***** plus an appropriate amount of interest will be returned to you. If you have any questions, you may contact ***** in the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/24416G
Re: § 58.1-1821 Application: Individual Income Tax
Dear ****
This will reply to your letter in which you protest the assessment made against ***** (the "Taxpayer") for the 1995 through 1997 taxable years.
FACTS
Pursuant to a review by the department, the Taxpayer was assessed for individual income taxes for the taxable years of 1995 through 1997. The department concluded that the Taxpayer was a domiciliary resident of Virginia for these years. The Taxpayer disputes the assessment and contends that he has never been a domiciliary resident of Virginia. Instead, he claims that he has always been a resident of a state other than Virginia ("State A").
The Taxpayer lived continuously in State A until he joined the United States military. The Taxpayer retired from the military in 1987. At this time, the Taxpayer was living in Virginia with his wife and children. Upon leaving the military, the Taxpayer accepted employment with an airline and was stationed in Washington D.C. The Taxpayer continued to live in Virginia until 1994 when the Taxpayer was stationed in State A by his airline employer. By this time, the Taxpayer had divorced from his wife. The Taxpayer moved to State A while his ex-wife and children remained in Virginia. The Taxpayer moved into a residence he owns jointly with his mother. The Taxpayer continues to live in this residence with his mother.
Upon review by the department, it was found that the Taxpayer still maintains a number of connections with Virginia. The Taxpayer has numerous vehicles registered in Virginia, real property in Virginia, a Virginia bank account, a Virginia driver's license, and wages reported to Virginia. Consequently, the Taxpayer was assessed individual income taxes for the 1995 through 1997 taxable years. The Taxpayer contends that he was not a domiciliary or actual resident of Virginia for the 1995 through 1997 taxable years, and that he has always been a domiciliary resident of State A.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. Domiciliary residence means the permanent place of residence of a taxpayer and/or the place to which he or she intends to return even though they may actually reside elsewhere. For an individual to change domiciliary residency to another state, that individual must intend to abandon their Virginia domicile with no intention of returning to Virginia. Concurrently, that individual 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 an individual who, for an aggregate of more than 183 days of the taxable year, maintained a place of abode within Virginia. A Virginia domiciliary resident, therefore, working in other parts of the country who has not abandoned his Virginia residency continues to be subject to Virginia taxation. Additionally, an individual 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 as a resident.
In determining domicile, consideration may be given to an 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, sites of real and tangible property, motor vehicle registration and licensing, and such other factors as may be reasonably deemed necessary to determine an individual's domicile. An individual's true intention must be determined with reference to all of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.
The department concedes that it is difficult to know whether an individual intends to return to Virginia. The individual has the burden of proving abandonment of his or her Virginia domicile. If the information is inadequate to meet this burden, the department will conclude that he or she intended to return to Virginia.
While the Taxpayer has numerous connections with Virginia that tend to lead to the conclusion that the Taxpayer is domiciled in Virginia, many of these can be reasonably explained by the fact that the Taxpayer's children reside in Virginia and are supported in part by the Taxpayer. During the years at issue, the automobiles that were registered to the Taxpayer in Virginia were used exclusively by his children. Likewise, the property the Taxpayer owns in Virginia was occupied by one of his children as a home while he attends college. The Taxpayer has an agreement in place for the sale of this property upon his son's graduation. The Virginia bank account is with a bank with branches available nationally. However, like the automobiles and the property, this bank account was not used by the Taxpayer but was used by his children for college money.
The Taxpayer has also provided evidence to explain the remaining connections with Virginia. The Taxpayer's employer incorrectly reported his wages to Virginia for the 1995 and 1996 taxable years. Also, the Taxpayer mistakenly obtained a Virginia driver's license in 1995 after receiving a traffic ticket in Virginia. Based on the information provided, it appears that the Taxpayer was not eligible to hold a Virginia driver's license.
The weight of the evidence in this case shows that the Taxpayer was neither an actual or domiciliary resident of Virginia during the taxable years of 1995 through 1997. While the Taxpayer did maintain connections to Virginia, the information provided reasonably explains these connections without creating domicile in Virginia. It is also clear from the information provided that the Taxpayer established a State A domicile when he was transferred by his employer.
Accordingly, the assessments for the taxable years of 1995 through 1997 have been abated. The department's records indicate that the Taxpayer's personal property tax refund for 1998 was withheld and applied to the assessments. The refund in the amount of $***** plus an appropriate amount of interest will be returned to you. If you have any questions, you may contact ***** in the Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/24416G
Rulings of the Tax Commissioner