Tax Type
Individual Income Tax
Description
Domiciliary resident of Virginia
Topic
Persons Subject to Tax
Property Subject to Tax
Residency
Date Issued
02-13-2002
February 13, 2002
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you make an application for the correction of individual income taxes assessed against ***** (the "Taxpayer") for the 1996 and 1997 taxable years. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is employed as an airline pilot who resided in Virginia with his spouse. In January 1996, the Taxpayer was transferred to State A. He rented a room on a month-to-month basis with the exception of a short period in which he rented an apartment with his spouse. With the exception of this two-month period during 1997, the Taxpayer's spouse remained in Virginia and lived in the couple's Virginia residence. When the Taxpayer was transferred to State B, he moved back to Virginia and commuted between State B and Virginia.
The Taxpayer owned three automobiles that remained licensed and garaged in Virginia. According to the Taxpayer, he usually used public transportation in State A and rented automobiles there as needed. The Taxpayer registered to vote in State A and obtained a State A driver's license in July 1996. The Taxpayer did not file Virginia income tax returns in 1996 or 1997, but did file a joint 1998 Virginia individual income tax return with his spouse.
Under audit, the department classified the Taxpayer as a domiciliary resident of Virginia for the 1996 and 1997 taxable years and assessed additional tax and interest. The Taxpayer contests the assessments and contends that he established domicile with State A during the periods at issue.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302, copy enclosed. Domiciliary residence means the permanent place of residence of a taxpayer and/or 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 domiciliary residency.
The Taxpayer performed several actions that are consistent with a change in domicile. The Taxpayer moved to State A after accepting a transfer offered by his employer. He obtained a State A driver's license and registered to vote in State A. The Taxpayer also established a residence in State A. However, the Taxpayer stated that he entered into a series of short-term leases because he did not know how long he would stay in State A. The Taxpayer has not shown that these leases are evidenced by written contracts.
In addition, there are a number of actions that indicate the Taxpayer's intent to maintain a Virginia domicile. The Taxpayer maintained a residence in Virginia where his spouse lived. The Taxpayer spent a substantially greater number of nights in Virginia during 1996 and 1997 than in State A. Additionally, the Taxpayer's three automobiles remained registered and garaged in Virginia.
The department concedes that it is difficult to know whether an individual intends to return to Virginia. 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 intended to return to Virginia.
Based on the information provided, I find that the Taxpayer has not shown sufficient evidence that he abandoned his Virginia domicile. Accordingly, as a domiciliary resident of Virginia, the assessments for the 1996 and 1997 taxable years are correct. The Taxpayer will receive an updated bill with interest accrued to date. The bill should be paid within 30 days to avoid the accrual of additional interest.
If you have any questions regarding this determination, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/29367E
Rulings of the Tax Commissioner