Tax Type
Individual Income Tax
Description
Residency; Request for Tax Previously Paid
Topic
Residency
Date Issued
10-01-2001
October 1, 2001
Re: § 58.1-1824 Protective Claim: Individual Income Tax
Dear *****
This is in reply to your letter in which you and your spouse (the "Taxpayers") request a protective claim for a refund of individual income taxes paid to Virginia for the 1996 through 1998 taxable years and part of the 1999 taxable year.
FACTS
Prior to 1990, the Taxpayers were domiciled in Virginia. Upon retiring from active duty in the United States military in 1989, the Taxpayers began residing outside the United States pursuant to a civilian employment arrangement with the military. The Taxpayers state that this employment outside of the United States was considered temporary and they planned to retire to a state other than Virginia. The Taxpayers remained outside of the United States until mid-1999 when they relocated back to Virginia due to a change in the employment policy for civilians in the military. Each year that the Taxpayers resided outside of the United States, they paid individual income tax to Virginia.
During the time the Taxpayers resided outside the United States, they maintained a number of contacts with Virginia. The Taxpayers held valid Virginia driver's licenses. They were also registered to vote in Virginia and actually voted absentee through Virginia three times. In addition to these connections, the Taxpayers owned two parcels of real estate in Virginia (one as rental property and the other for investment purposes) and maintained two bank accounts in Virginia.
The Taxpayers state that they intended to abandon their domicile with Virginia when they moved outside of the United States in 1990. They therefore believe that they unnecessarily paid individual income taxes to Virginia from 1990 through part of 1999 and are requesting refunds for the 1996 through 1998 taxable years and part of the 1999 taxable year.
DETERMINATION
Code of Virginia § 58.1-1824 provides that the Tax Commissioner may rule on a protective claim for refund based on the information provided pursuant to Code of Virginia § 58.1-1821. As permitted by statute, your request has been treated as an appeal under Code of Virginia § 58.1-1821.
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 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.
In the instant case, the Taxpayers have only provided a simple declaration of their intent to abandon Virginia as their domicile. While they did change their residence in 1990, the Taxpayers have not provided the department with any evidence that they established a domicile outside of Virginia. The information provided shows substantial connections to Virginia remained in place while the Taxpayers resided outside of the United States. Based on the information provided, the Taxpayers have failed to show that they abandoned their Virginia domicile and established a domicile outside of Virginia. Accordingly, I cannot grant your request of a refund of individual income taxes paid for the 1996 through 1999 taxable years.
If you have any questions regarding this determination, you may contact ***** in the Office of Policy and Administration, Policy Development, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
PDO/33765G
Rulings of the Tax Commissioner