Tax Type
Individual Income Tax
Description
Taxpayer failed to abandon permanently, his Virginia domicile
Topic
Persons Subject to Tax
Date Issued
09-16-2004
September 16, 2004
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will reply to your letter in which you seek correction of the individual income tax assessment issued to ***** (the "Taxpayer") for the taxable year ended December 31, 2000. I apologize for the delay in this response.
FACTS
The Department obtained information that third party information returns for the 2000 taxable year had been mailed to the Taxpayer in Virginia. The Department sent to the Taxpayer a questionnaire to determine whether or not he was required to file a Virginia individual income tax return. In response to the Department's inquiry, the Taxpayer contends that he permanently left his Virginia domicile and began to reside at the home of an adult son ("Son A") in ***** ("State A") in November 1999.
The Taxpayer was a Virginia resident at the time he retired in 1999. At this time, the Taxpayer owned and resided in a home in Virginia, held a Virginia driver's license, and owned a motor vehicle registered in Virginia. In anticipation of his retirement, the Taxpayer purchased a recreational vehicle ("RV") with Son A, and registered the RV in Son A's name in State A. In October 2000, the Taxpayer obtained a State A driver's license and registered to vote in State A.
The Taxpayer asserts that he was present in Virginia for only nine days in 2000 and spent most of the year traveling in his RV. The Taxpayer continued to own the Virginia home and a vehicle that was registered and parked in Virginia. The Taxpayer claims that he retained the home and motor vehicle in Virginia primarily for the use of another adult son ("Son B").
The Department concluded that the Taxpayer failed to abandon permanently, his Virginia domicile and establish a State A domicile in 2000 and assessed Virginia tax, interest and penalty. The Taxpayer contends that he abandoned his Virginia domicile and established a State A domicile in November 1999.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Code § 58.1-302. 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 another state, that person must intend to abandon his Virginia domicile with no intention of returning to Virginia. 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, therefore, 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 domicile.
In order to change from one legal domicile to another legal domicile, there must be (1) actual abandonment of the old domicile, coupled with an intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and an intent to remain there permanently or indefinitely. The burden of proving that the domicile has been changed lies with the person alleging the change. The Department concedes that it is difficult to know whether a taxpayer intends to return to Virginia. The Department determines a taxpayer's intent through the information provided. The Taxpayer has the burden of proving that he or she has abandoned his or her Virginia domicile. If the information is inadequate to meet his or her burden, the Department must conclude that he or she intended to return to Virginia.
The Taxpayer claims that he intended to change his domicile from Virginia to State A in November 1999. To evidence his intent to establish domicile in State A, the Taxpayer asserts that he moved into Son A's home in State A and used the RV registered in State A under Son A's name as his primary source of transportation. As for abandoning his Virginia domicile, the Taxpayer avers that the residence he continued to own in Virginia was not available for his use because Son B was using it. In addition, the Taxpayer claims that the information returns were mailed to Virginia because Son B handles all of his paperwork. However, none of these arrangements are evidenced by objective evidence. The Taxpayer has provided no lease agreements or moving receipts to evidence the move in 1999.
The only objective evidence that the Taxpayer has provided to indicate that a change in domicile occurred is the acquisition of a State A driver's license and voter registration in October 2000. Such evidence is insufficient to show that the Taxpayer intended to change his domicile from Virginia to State A in November 1999. This evidence demonstrates that the earliest that a change of domicile could have occurred was October 2000. When considering this evidence with the other circumstances of this case, the Department will concede that the Taxpayer successfully abandoned his Virginia domicile and acquired a State A domicile in October 2000.
Accordingly, the Taxpayer is required to file a part-year Virginia income tax return for the 2000 taxable year. Please send a part-year return for the 2000 taxable year reflecting the date of the domicile change to ***** Office of Policy and Administration, Appeals and Rulings, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23218-1880 within 30 days of the date of this letter. If we do not receive the return within the 30-day period, we will adjust the assessment in accordance with this determination based on the information currently available.
The Code of Virginia sections and public documents cited, as well as other reference documents, are available on-line in the Tax Policy Library section of the Department of Taxation's web site, located at www.tax.state.va.us. If you have any other questions, you may contact ***** at *****.
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- Sincerely,
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- Kenneth W. Thorson
- Tax Commissioner
- Kenneth W. Thorson
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AR/49262B
Rulings of the Tax Commissioner