03-47 | Virginia Tax

Tax Type

Individual Income Tax

Description

Barbara Woods vs Department of Taxation

Topic

Court Case

Date Issued

01-01-2003

see date

VIRGINIA:

IN THE CIRCUIT COURT FOR WISE COUNTY AND THE CITY OF NORTON

BARBARA B. WOODS )
Plaintiff, )
v. ) Case No. L 97-422
)
COMMONWEALTH OF VIRGINIA )
DEPARTMENT OF TAXATION, )

- - - - Defendant )

FINAL ORDER

This Court heard this case on the merits without a jury pursuant to Va. Code Ann. § 58.1-1825. This Court considered all the evidence at trial on October 31, 2000 and the arguments of counsel in post-trial memoranda. In accordance with this Court's letter dated November 28, 2001 and memorandum dated March 18, 2002, this Court finds that Barbara B. Woods remained domiciled in Virginia for all of 1993, 1994, and 1995. Accordingly, pursuant to Va. Code Ann. § 58.1-1826, it is ordered that Barbara B. Woods's request for a refund of the Virginia individual income taxes she paid for tax years 1993, 1994, and 1995 is denied and this case is dismissed with prejudice.

The clerk will forward an attested copy of this order to counsel of record and to the Commissioner of the Virginia Department of Taxation.

Entered: March 20, 2002

- - - - Birg E. Sergent
        Circuit Court Judge

I ASK FOR THIS:

COMMONWEALTH OF VIRGINIA DEPARTMENT OF TAXATION

By Counsel:

James C. Stuchell (VSB #41941)
Assistant Attorney General
900 East Main Street
Richmond, Virginia 23219
Phone: (804) 786-1192
Fax: (804) 371-2087

SEEN AND OBJECTED TO

BARBARA B. WOODS

By Counsel:

Joe H. Roberts (VSB #27131)
Joe H. Roberts, P.C.
106 Spring Ave, N.E.
P.O. Box 1438
Wise, Virginia 24293
Phone: (540) 328-3158
Fax: (540) 328-3170

COMMONWEALTH OF VIRGINIA

IN THE CIRCUIT COURT OF WISE COUNTY AND THE CITY OF NORTON

BARBARA B. WOODS PLAINTIFF

VS. L-97-422
MEMORANDUM DECISION

COMMONWEALTH OF VIRGINIA DEFENDANT
DEPARTMENT OF TAXATION

This case is filed by the Plaintiff to recover Virginia State income taxes paid for the calendar years 1993, 1994 and 1995, pursuant to Section 58.1-1825 of the Code of Virginia of 1950 as amended. This decision is issued pursuant to Section 58.1-1826. The only substantial issue is the domicile of the plaintiff during those years.

The statute provides that the burden of proof to establish that the assessment or collection is erroneous or otherwise improper is upon the applicant. (58.1-1825). Section 58.1-205.1 recites that the assessment of a tax by the Department shall be prima facie correct. The burden of proof therefore, is upon the Plaintiff to establish by a preponderance of the evidence that her domicile during the calendar and tax years of 1993, 1994 and 1995 was in the State of Tennessee. (Defendant argues for a higher standard for the burden of proof, but for the purpose of this case, the plaintiff will get the benefit of a lower standard of proof than proposed by the defendant.)

FACTS

The facts are not in substantial dispute. The Plaintiff Mrs. Woods lived with her husband Charles V. Woods in Wise County, Virginia for many years. They had built a new home near Big Stone Gap in 1967. Both had employment in Wise County, and as of the end of 1992, all parties would agree that they were residents of and domiciled in Wise County, Virginia. Virginia State Income Taxes were properly filed and paid for that year. The title to the home was in the name of the husband and wife. The address was Route # 1, Box 462, Big Stone Gap, Virginia 24249.

Mrs. Woods left her employment in Wise County in 1988, and began full time employment in Johnson City, Tennessee from that time until the present time. She first commuted daily to Tennessee for her employment. Mr. and Mrs. Woods purchased an apartment building in Johnson City, Tennessee in 1988. She moved her personal belongings to Johnson City, Tn. in 1992, and took up residence in Apartment No. Six of a six unit apartment building which was shared with her son. The son was a student at a local university and managed the apartment until he moved. The telephone listing for the relevant years were in the name of the son, Brian Woods. Her husband had lost his employment in Wise County, Virginia in June of 1992 and moved into that apartment also. He studied to begin a new career as a nursing home administrator, and after completing his studies, he took a job in Clifton Forge, Virginia. He maintained employment and residence in that town until the present time.
The parties filed separate federal income tax returns for 1993, she listing her employer's address of 2421 John B. Dennis Highway, Kingsport, Tn. 37660 on the Federal Form. The husband listed his address in Clifton Forge, Virginia. A 1099 form from First American National Bank of Nashville, Tn. listed the address of the husband and wife as 631 N. Center Street, Apt 6, Johnson City, Tn. 37604. Two W--2 forms from the wife's employer also listed the apartment address.

For the years 1994 and 1995, the parties filed a joint federal income tax return listing their address as 2421 John B. Dennis Highway, Kingsport, Tennessee, 37660. That is the address of wife's employer.

The Taxpayer plaintiff called five witnesses on the issue of domicile. First, Mr. Randy Castle testified that he had been a neighbor to the Woods family since they moved to the home near Big Stone Gap in about 1990. He knows they lived there but they have left. "The house is still there but they have left." Tr. Page 11.

The next witness for the plaintiff was Darrell Caruso, a nephew of the plaintiff and her husband. He checks on the Big Stone property for them on a regular basis. He helped the petitioner move to Johnson City in the fall of 1992 or 1993. He helped her move her clothes, no furniture. The furniture is still in the house.

The next witness for the petitioner was Mr. Kenny Crowder, the general manager of the Lonesome Pine Country Club. The Petitioner was a member of the club, and in 1992 or 1993, the membership was changed from a regular member or a non-resident status. She told him she had moved to Johnson City, Tn. But the bill was sent to her husband in Clifton Forge, Va.

The fourth witness for the petitioner was her husband, Charles Vernon Woods. At page 32 of the transcript, he outlined their marital life together. They had lived in the Big Stone Gap residence since about 1967. He lost his insurance agency job in June of 1992 (TR p. 23). He moved into the Johnson City apartment in November of 1992. He trained for a new career as a nursing home administrator living in or near Nashville Tn. for about four months. He then took the job in Clifton Forge, Virginia, and has remained there ever since. He lives in a mobile home titled in his wife's name which was purchased in May of 1995. (Tr. p. 27) It was parked in Virginia at Clifton Forge and was titled in his wife's name. He testified that all of their vehicles are purchased in his wife's name. In 1996 he purchased a new Saab vehicle, also titled in his wife's name and he used it in Clifton Forge for several months. After he received a company vehicle to drive, this car was used by his wife in Tennessee.

The last witness was the Petitioner. She generally testified that the living arrangements of the family were the same as the husband's testimony. She testified that she was a resident of Tennessee at 631 North Center Street, Apt. # 6 in Johnson City, Tennessee 37604, and had been since 1992. (Tr. 68). She agreed that the moving was caused by her husband losing his job. (Tr. 69, line 19). She changed her voting registration from Virginia to Tennessee in 1996. She had not done it before because "Mr. Roberts, it just wasn't an issue." (Tr. p.76)

Her 1993 W-2 forms for her employment listed her address as 631 N. Center St., No.6, Johnson City, Tennessee. (Tr. p78) Her W-2 forms for 1994 and 1995 also carried the same address. On page 84, she testifies that she had never planned to return to Virginia, and she wished to sever all her relations with Virginia.

On page 146 and 147 of the transcript, Mrs. Woods states that she was a registered voter in Wise County, Virginia from 1966 until 1996, and that she voted in the Wise County, Virginia general election for 1995.

During the relevant periods of time, Ms. Woods had both a Virginia Drivers permit and a Tennessee Driver's permit. (Tr.169)

- - - - APPLICABLE LAW

Both parties place their primary reliance upon two cases cited in both briefs. Cooper's Adm'r Vs. Commonwealth, 121 Va. 338 (1917) is an old personal property tax case. The issue was whether the deceased was a resident of Virginia or West Virginia. The general black letter law of residence and domicile is set out in this case, plus discussion of the relevance of voting.

The case recites that every person must have a domicile, and the existing domicile continues until a new one is established. (@ p.345) Domicile is defined to be residence at a particular place, accompanied with positive or presumptive proof of intention to remain there for an unlimited time.

In this case, great importance was attached to the act of voting by the taxpayer at his old domicile. On page 349 of that decision, it is stated "In doubtful cases, particular significance should be attached to the repeated exercise of the right to vote, because this right depends upon citizenship and domicile, and must generally, if not universally, supported by the oath of the voter. Its unlawful exercise subjects him to prosecution both for illegal voting and for perjury if he swears falsely, and such act is a distinct, unequivocal and public assertion by the voter of his legal domicil."

State Planters Bank V. Commonwealth ,174 Va. 289 is also cited by the parties. In that case, a lady domiciled in Richmond moved to Rome, Italy and lived there for forty years. She retained some contacts with Virginia but the Court held that her major interests in life were centered in Rome. The Court held that the deceased had changed her domicile in this case.

The Court has read all the cases by the parties in their respective briefs. They recite the usual black letter law. All are instructive but none are definitive or controlling. Issues of domicile and residence are always fact specific, and finding a controlling case is rare.

ANALYSIS

The Court finds that the petitioner did not change her domicile from Virginia to Tennessee during the taxable years 1993, 1994 or 1995. The Court finds that the petitioner moved to Tennessee during the tax year 1992 for employment purposes, and also because of a severe employment problem with her husband losing his job as an insurance agent. He also moved to Tennessee for the purpose of changing his career plans. He trained as a nursing home administrator in Tennessee, and at the time of the move, he did not know where his employment would take him. The family moved to Tennessee in some amount of confusion as to their future plans. While the petitioner planned to live in Tennessee for some time she did not present evidence that she gave up all the incidents of Virginia citizenship or her Virginia ties. She retained her voting rights in Virginia, her joint bank account with her husband in the Big Stone Gap Bank, and importantly, her Virginia drivers license. Even when she acquired a Tennessee drivers license, she made' it a point to retain the Virginia license also. While she gave up her regular membership in the local country club in Big Stone Gap, Va., she retained a nonresident membership, indicating her continuing interest in retaining a nexus to her Virginia domicile. The home in Big Stone Gap is still intact with all utilities and furniture, apparently ready to use or for the return of the parties if it became necessary.

For all these reasons, the Court cannot find that the petitioner gave up all nexus with her old domicile. Her conduct indicates a tendency to hold on to the Virginia ties, even while residing in Tennessee for most of the days and nights during the three year period. This is especially true when the evidence is clear that she felt qualified to vote in the Wise County, Virginia election in 1995.

An order will be entered finding for the Defendant and the case will be dismissed from the docket.

- Dated this March 18, 2002.

- - - - Birg E. Sergent, Judge.

Rulings of the Tax Commissioner