Document Number
Tax Type
Individual Income Tax
Domiciliary resident
Taxable Income
Date Issued

December 9, 2002

Re: § 58.1-1821 Application: Individual Income Tax

Dear *****:

This will reply to your letter in which you seek correction of the Virginia individual income tax assessments issued to your client, ***** (the "Taxpayer"), for the 1988 through 1997 taxable years.

During the 1988 through 1997 taxable years, the Taxpayer was employed by various international companies. As a result of that employment, the Taxpayer spent the majority of each year outside of the United States ("U.S."). The Taxpayer was a resident of another state ("State A") prior to accepting employment during the period in question. The Taxpayer rented a vacation home in Virginia for one month in 1988. Subsequently, the Taxpayer purchased a house nearby.

The Taxpayer obtained a Virginia driver's license in 1992 and registered to vote in Virginia. During the 1990's, the Taxpayer's children attended various Virginia universities.

Upon review by the Department, it was determined that the Taxpayer was a domiciliary resident of Virginia for the 1988 through 1997 taxable years. He was assessed tax, penalty and interest for these years. The Taxpayer contends that he has never been a domiciliary resident of Virginia and is requesting that the assessments for the taxable years 1988 through 1997 be abated.


Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Code 58.1-302. Domiciliary residence means the permanent place of residence of a taxpayer and 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 or abandon domicile residency.

The Department concedes that it is difficult to know whether an individual intends to abandon his or her domicile. 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 was a domiciliary resident of Virginia.

Subsequent to the audit, the Taxpayer provided additional information to the Department. The information included copies of income tax returns filed with the foreign countries where he lived, letters from employers attesting to the Taxpayer assignments, leases for apartments in foreign countries, foreign driver's licenses and work permits, and other documentation identifying the Taxpayer's locations for the period in question. These documents only show that the Taxpayer spent the majority of each year outside of Virginia. However, the law is very clear that a person may be domiciled in Virginia without being present in Virginia for a majority of the year.

When the Taxpayer acquired a house in Virginia in 1988, he began to take steps that indicated an intent to establish a domicile in Virginia. In addition to buying the house, the Taxpayer registered several vehicles in Virginia, made donations to the local police and fire departments, and had mail delivered to his Virginia address. The Taxpayer claims no connections to any other state in the U.S. and that he purchased the Virginia residence only as a vacation home.

The Taxpayer has stated to the Department that the last place in which he registered to vote was in State A. The Department, however, has discovered that the Taxpayer did, in fact, register in August 1992 to vote in Virginia. By registering to vote, the Taxpayer signed a registration application in which he had to swear under penalty of perjury that he was a domiciliary resident of Virginia qualified and entitled under the Constitution of the Commonwealth of Virginia to register to vote. The qualifications necessary to register to vote in Virginia are set forth under Article II, § 1 of the Constitution of Virginia. Article II requires that any person registering to vote must be domiciled in Virginia and have their place of abode in Virginia. The Taxpayer freely and voluntarily signed a statement certifying that he was a domiciliary resident of Virginia under the penalty of perjury. Given the possible penalties against the Taxpayer, this action displays a clear intent that the Taxpayer considered himself a domiciliary resident of Virginia.

The Taxpayer and his wife obtained Virginia driver's licenses in 1992. The Taxpayer states that the reason they obtained Virginia driver's licenses was to make it easier to rent automobiles while traveling in the U.S. The Taxpayer contends that this is permissible, as there is nothing in Virginia law that restricts the issuance of driver's licenses to Virginia residents only. Va. Code § 46.2-100 defines "nonresident" as every person who is not domiciled in Virginia, with certain exceptions not relevant to this appeal. Va. Code § 46.2-323.1 states that, "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 a statement which certifies that the applicant is a Virginia resident; therefore, a Virginia domiciliary resident. A person providing a false statement is subject to punishment under the laws of the Commonwealth. By obtaining these licenses, the Taxpayer has again demonstrated an intent to be a domiciliary resident of Virginia.

When the Taxpayer's children applied for admission to various Virginia universities, the Taxpayer provided residency information to the Virginia universities on the application for in-state tuition rates. These applications for in-state tuition rates were completed and signed by the Taxpayer, certifying that all of the information was true and complete. On each application, the Taxpayer indicated that he had been living in Virginia for at least two years. He indicated that in the year prior to completing each application that he had filed a tax return with Virginia and paid income tax on all earned income, held a Virginia driver's license, was registered to vote in Virginia, and had vehicles registered in Virginia. These applications evidence a clear indication of intent to be considered a domiciliary resident of Virginia.

Given the facts present in this case, it is clear that the Taxpayer did intend to establish a domicile in Virginia. Although the Taxpayer spent a substantial amount of each year in question outside of the U.S., he clearly established and maintained connections with Virginia. Based on the information provided, the Taxpayer's actions show a clear intent to establish domicile in Virginia in August 1992 when the Taxpayer registered to vote in Virginia. Therefore, the assessments for the 1992 taxable year and after are proper and collectible at this time. The assessments for the 1988 through 1991 taxable years will be discharged.


Penalties were assessed under the provisions of Va. Code § 58.1-308, which provides that if the tax liability is false or fraudulent with the intent to evade tax, a 100% penalty will be assessed. The Taxpayer was a domiciliary resident of Virginia and aware of the requirement to file a Virginia income tax return. Nevertheless, he intended to evade the Virginia income tax by not filing income tax returns for 1992 through 1997 with Virginia, while still claiming that he was a Virginia resident by registering to vote, obtaining a Virginia driver's license, and obtaining in-state tuition for his children at two Virginia universities. In contrast with his assertion to the Department that he was not a Virginia resident, when applying for in-state tuition, the Taxpayer indicated on his children's college applications that he was a Virginia resident and had filed Virginia tax returns and paid income tax to Virginia on all earned income. Accordingly, the penalty for fraud against the Taxpayer is upheld.

    • Because the Taxpayer has failed to file Virginia income tax returns from the remaining years at issue, the outstanding assessments, as summarized on the enclosed schedule, are based on federal information obtained for the 1992 through 1995 taxable years and include a number of estimates and assumptions. The Taxpayer may be able to reduce the amount of the assessments by filing Virginia returns for the 1992 through 1997 taxable years. The Taxpayer should complete and file Virginia individual income tax returns with the Department within 60 days from the date of this letter, addressing them to ***** Virginia Department of Taxation, Post Office Box 1880, Richmond, Virginia 23218-1880. If these returns are not filed in the time permitted, the outstanding assessments will be considered correct, due and payable.

In addition, as the Taxpayer has not established that he has abandoned his Virginia domicile, Virginia income tax returns are due for the 1998 through 2001 taxable years. These returns should be filed with the Department at Post Office Box 760, Richmond, Virginia 23218-0760, as soon as possible.

If the Taxpayer is unable to pay the balance due in full within the time specified, he may contact ***** in the Department's Collections Unit at ***** to arrange a partial payment plan. Please note that while a payment plan will provide an extended period for payment of the balance due, interest will continue to accrue on the balance until paid.

The Code of Virginia sections cited and other reference documents are available online in the Tax Policy Library section of the Department's web site, located at If you have any questions regarding this determination, contact ***** at *****.
                • Sincerely,

                • Kenneth W. Thorson
                  Tax Commissioner


Last Updated 08/25/2014 16:46