Tax Type
Individual Income Tax
Description
Domiciliary residency; Retired military personnel
Topic
Residency
Date Issued
09-15-2000
September 15, 2000
Re: § 58.1-1821 Application: Individual Income Taxation
Dear ****
This will reply to your letters in which you contest the assessment of tax, penalty and interest assessed against ***** (the "Taxpayers") for the 1995 through 1997 taxable years. I apologize for the delay in response.
FACTS
The Taxpayers, a husband and wife, resided in Virginia from July 1992 though June 1997. The husband retired from active military duty in September 1994. The Taxpayers were both employed by businesses located in Virginia for the taxable years in question. The Taxpayers registered their cars in Virginia and held Virginia drivers' licenses during the 1995 through 1997 taxable years. Third party information returns were sent to the Taxpayers at their Virginia address. The Taxpayers contend that they were domiciliary residents of another state ("State A") while the husband was in the military and that they never became Virginia residents.
DETERMINATION
Code of Virginia § 58.1-322 (copy enclosed) provides that all Virginia residents with sufficient Virginia taxable income are subject to Virginia income tax. Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302 (copy enclosed). The domiciliary residence of a person means that the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. For a person to change domiciliary residency to Virginia, that person must intend to abandon his old domicile, with no intention of returning to that same domicile. Concurrently, that person 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 a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. A Virginia domiciliary resident working in other parts of the country who has not abandoned his Virginia residency continues to be subject to Virginia taxation. 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 determining domicile, consideration may be given to the 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 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. A simple declaration is not sufficient to establish residency.
A review of the evidence indicates that the Taxpayers had the intention to be domiciliary residents of Virginia. They maintained a residence in the Commonwealth, possessed Virginia drivers' licenses and registered automobiles in Virginia. In addition, both were employed full time in Virginia, and received all third party returns at their Virginia address. There is no evidence that the Taxpayers maintained any contacts with State A.
Regardless of domicile, the Taxpayers admit that they resided in Virginia for the entire 1995 and 1996 taxable years. As such, they were actual residents of Virginia because they maintained a place of abode in the Commonwealth for more than 183 days in each of these years. They were not actual residents of Virginia for the 1997 taxable year because they resided in Virginia less than 183 days. However, they were Virginia domiciliary residents during the portion of 1997 that they resided in the Commonwealth. Both actual and domiciliary residents are subject to Virginia tax on all their income, but may be eligible for a credit for tax paid to another state.
Accordingly, the department's assessments have been upheld. Please remit payment according to the enclosed schedule to ***** at Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23218-1880, within 30 days to avoid the accrual of additional interest. If you have any questions regarding this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/13949B
Re: § 58.1-1821 Application: Individual Income Taxation
Dear ****
This will reply to your letters in which you contest the assessment of tax, penalty and interest assessed against ***** (the "Taxpayers") for the 1995 through 1997 taxable years. I apologize for the delay in response.
FACTS
The Taxpayers, a husband and wife, resided in Virginia from July 1992 though June 1997. The husband retired from active military duty in September 1994. The Taxpayers were both employed by businesses located in Virginia for the taxable years in question. The Taxpayers registered their cars in Virginia and held Virginia drivers' licenses during the 1995 through 1997 taxable years. Third party information returns were sent to the Taxpayers at their Virginia address. The Taxpayers contend that they were domiciliary residents of another state ("State A") while the husband was in the military and that they never became Virginia residents.
DETERMINATION
Code of Virginia § 58.1-322 (copy enclosed) provides that all Virginia residents with sufficient Virginia taxable income are subject to Virginia income tax. Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302 (copy enclosed). The domiciliary residence of a person means that the permanent place of residence of a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. For a person to change domiciliary residency to Virginia, that person must intend to abandon his old domicile, with no intention of returning to that same domicile. Concurrently, that person 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 a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. A Virginia domiciliary resident working in other parts of the country who has not abandoned his Virginia residency continues to be subject to Virginia taxation. 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 determining domicile, consideration may be given to the 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 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. A simple declaration is not sufficient to establish residency.
A review of the evidence indicates that the Taxpayers had the intention to be domiciliary residents of Virginia. They maintained a residence in the Commonwealth, possessed Virginia drivers' licenses and registered automobiles in Virginia. In addition, both were employed full time in Virginia, and received all third party returns at their Virginia address. There is no evidence that the Taxpayers maintained any contacts with State A.
Regardless of domicile, the Taxpayers admit that they resided in Virginia for the entire 1995 and 1996 taxable years. As such, they were actual residents of Virginia because they maintained a place of abode in the Commonwealth for more than 183 days in each of these years. They were not actual residents of Virginia for the 1997 taxable year because they resided in Virginia less than 183 days. However, they were Virginia domiciliary residents during the portion of 1997 that they resided in the Commonwealth. Both actual and domiciliary residents are subject to Virginia tax on all their income, but may be eligible for a credit for tax paid to another state.
Accordingly, the department's assessments have been upheld. Please remit payment according to the enclosed schedule to ***** at Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23218-1880, within 30 days to avoid the accrual of additional interest. If you have any questions regarding this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/13949B
Rulings of the Tax Commissioner