Tax Type
Individual Income Tax
Description
Involuntary resident; Actual resident
Topic
Persons Subject to Tax
Taxpayers
Date Issued
10-05-2000
October 5, 2000
Re: § 58.1-1821 Application: Individual Income Taxation
Dear ****
This will reply to your letter in which you contest the assessment of tax and interest against your clients, * * * (the "Taxpayers"), for the 1997 taxable year. I apologize for the delay in responding.
FACTS
The Taxpayers, a husband and wife, are domiciliary residents of another state ("State A"), who reside a portion of the year in a residence they own in Virginia. They moved to State A from Virginia in 1988, but continued to earn income from rental property in Virginia. Their Virginia residence was used as an office and a storage facility for the operation of their rental property. During the 1997 taxable year, the wife underwent a medical procedure that caused the Taxpayers to remain in Virginia for more than 183 days.
While the Taxpayers concede that they resided in Virginia for more than 183 days, you contend that they should be treated as nonresidents because their stay in Virginia was involuntary due to the wife's medical complications.
DETERMINATION
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 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 his 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, whether domiciled in Virginia or not." 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.
The department has upheld the assessment of income tax against individuals who have become actual residents of Virginia by involuntarily residing in the Commonwealth for more than 183 days. See Public Document ("P.D.") 00-68 (5/10/00)(copy enclosed). In P.D. 00-68, the Commissioner held that an individual, who was an out-of-state domiciliary, was subject to Virginia income tax as an actual resident when that person was placed in a nursing home for more than 183 days after becoming ill while visiting relatives in Virginia.
In this case, the Taxpayers chose to have the wife undergo a medical procedure in Virginia because of the reputation of a physician that had previously treated her. Their stay in Virginia was extended due to additional medical complications. During this time, the Taxpayers stayed in their Virginia house. While I sympathize with the Taxpayer's situation, I must conclude that the Taxpayers were actual residents of Virginia for the 1997 taxable year.
In order that the Taxpayer's 1997 tax liability may be more accurately assessed, they may complete a 1997 Virginia resident income tax return and send it along with the required payment to * * * Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23233 within 30 days. If the department does not receive the 1997 return and the respective payment within the 30 day period, the department's assessment as issued will be upheld. If you have questions regarding this determination, you may contact * * * at * * *
Danny M. Payne
Tax Commissioner
Re: § 58.1-1821 Application: Individual Income Taxation
Dear ****
This will reply to your letter in which you contest the assessment of tax and interest against your clients, * * * (the "Taxpayers"), for the 1997 taxable year. I apologize for the delay in responding.
FACTS
The Taxpayers, a husband and wife, are domiciliary residents of another state ("State A"), who reside a portion of the year in a residence they own in Virginia. They moved to State A from Virginia in 1988, but continued to earn income from rental property in Virginia. Their Virginia residence was used as an office and a storage facility for the operation of their rental property. During the 1997 taxable year, the wife underwent a medical procedure that caused the Taxpayers to remain in Virginia for more than 183 days.
While the Taxpayers concede that they resided in Virginia for more than 183 days, you contend that they should be treated as nonresidents because their stay in Virginia was involuntary due to the wife's medical complications.
DETERMINATION
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 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 his 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, whether domiciled in Virginia or not." 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.
The department has upheld the assessment of income tax against individuals who have become actual residents of Virginia by involuntarily residing in the Commonwealth for more than 183 days. See Public Document ("P.D.") 00-68 (5/10/00)(copy enclosed). In P.D. 00-68, the Commissioner held that an individual, who was an out-of-state domiciliary, was subject to Virginia income tax as an actual resident when that person was placed in a nursing home for more than 183 days after becoming ill while visiting relatives in Virginia.
In this case, the Taxpayers chose to have the wife undergo a medical procedure in Virginia because of the reputation of a physician that had previously treated her. Their stay in Virginia was extended due to additional medical complications. During this time, the Taxpayers stayed in their Virginia house. While I sympathize with the Taxpayer's situation, I must conclude that the Taxpayers were actual residents of Virginia for the 1997 taxable year.
In order that the Taxpayer's 1997 tax liability may be more accurately assessed, they may complete a 1997 Virginia resident income tax return and send it along with the required payment to * * * Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23233 within 30 days. If the department does not receive the 1997 return and the respective payment within the 30 day period, the department's assessment as issued will be upheld. If you have questions regarding this determination, you may contact * * * at * * *
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner