March 29, 2023
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek correction of the individual income tax assessment issued to ***** (the “Taxpayer”) for the taxable year ended December 31, 2018.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2018 taxable year. A review of the Department’s records showed that the Taxpayer had not filed a return. The Department requested additional information from the Taxpayer in order to determine if his income was taxable in Virginia. After reviewing the information provided, the Department determined that the Taxpayer was a domiciliary resident of Virginia for the 2018 taxable year and issued an assessment. The Taxpayer appeals, contending he was a resident of ***** (State A).
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia Code § 58.1-302. The domiciliary residence of a person means the permanent place of residence of that person and the place to which that person intends to return even though they may be residing elsewhere. For a person to change domiciliary residency to another state or country, that person must intend to abandon their Virginia domicile with no intention of returning to Virginia. 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 their place of abode within Virginia. A Virginia domiciliary resident, therefore, working in other parts of the country or in another country who has not abandoned their 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 order to change from one legal domicile to another legal domicile, there must be (1) 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 burden of proving that the domicile has been changed lies with the person alleging the change.
In determining domicile, consideration may be given to the person’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, situs of real or 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 the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.
The Department determines a taxpayer’s intent through the information provided. The taxpayer has the burden of proving that their Virginia domicile has been abandoned. If the information is inadequate to meet this burden, the Department must conclude that the taxpayer intended to remain indefinitely in Virginia.
The Taxpayer took several steps indicating his intent to establish domicile in State A. He accepted full-time employment in State A in April 2017 and moved there to begin working. Consistent with the move, he filed a 2017 Virginia part-year resident return indicating a Virginia residence ending date in April 2017. He had State A taxes withheld from his wages and filed State A resident income tax returns for the 2018 through 2020 taxable years. The Taxpayer had family in State A and resided with a relative before leasing a personal residence in State A in June 2018. He also registered to vote in State A in October 2018. In addition, the Taxpayer states that he obtained a State A driver’s license and registered his vehicle in State A in 2018. The Taxpayer submitted evidence that he obtained the license and vehicle registration, although the precise dates he first obtained these are unclear from the documentation provided.
The Taxpayer also maintained some connections with Virginia. He retained his Virginia driver’s license until it was surrendered to State A in January 2019. His parents also continued to live in Virginia, and he lived at their residence when he returned to Virginia in 2021. In addition, the Taxpayer received certain 2018 informational returns at his parents’ Virginia address.
Virginia Code § 46.2-323.1 states, “No driver’s license... shall be issued to any person who is not a Virginia resident.” In fact, this section states that every person applying for a driver’s license must execute and furnish to the Commissioner of the Department of Motor Vehicles (DMV) a statement that certifies that the applicant is a Virginia resident. The Department has found that an individual may successfully establish a domicile outside Virginia even if that individual retains a Virginia driver’s license. See Public Document (P.D.) 00-151 (8/18/2000). However, obtaining or renewing a Virginia driver’s license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/9/2002).
With regard to eligibility to vote, the Department considers the fact that a taxpayer obtained a Virginia voter’s registration and voted in Virginia elections to be very strong evidence that that individual considered Virginia to be their domicile during the time they held and used such registrations. Similarly, registering to vote in State A provides strong evidence that the Taxpayer considered State A to be his domicile. See Article II, Section 1 of the Constitution of Virginia, Virginia Code § 24.2-101, and Coopers Adm’r v. Commonwealth, 121 Va. 338, 93 S.E. 680 (1917).
The Department acknowledges that a change of domicile occurs as part of a process in which no single factor is dispositive. Further, the change is generally considered to have occurred at the beginning of the process. See P.D. 16-138 (6/24/2013). In this case, the Taxpayer moved to State A for full-time work, and obtained a State A driver’s license, vehicle registration, and voter registration. While these may not have been obtained immediately after the Taxpayer left Virginia to work in State A, the preponderance of the evidence suggests he intended to make State A his domicile. After carefully considering all of the evidence presented, I find that the Taxpayer successfully changed his domicile to State A for the 2018 taxable year. Accordingly, the assessment will be abated.
The Code of Virginia sections and public documents cited are available online at www.tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/4280.X