Tax Type
Individual Income Tax
Description
Performed sufficient actions to establish their new domicile in State A
Topic
Residency
Date Issued
06-10-2005
June 10, 2005
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 "Taxpayers") for the taxable year ended December 31, 1999. I apologize for the delay in the Department's response.
FACTS
The Taxpayers, a husband and wife, were Virginia domiciliary residents in 1999 when the wife inherited an interest in a relative's home in ***** ("State A"). In October, the Taxpayers began moving to the inherited property.
The Taxpayers filed a Virginia part-year resident individual income tax return reflecting an October 1, 1999 change of domicile. Under audit, the Department determined that the Taxpayers remained domiciliary residents of Virginia during 1999 and issued an assessment. The Taxpayers contend that they became domiciliary residents of State A on October 1, 1999, when the husband accepted employment there. The Taxpayers, therefore, request abatement of the 1999 taxable year assessment.
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 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 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) acquisition of a new domicile at another place that 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.
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.
The Department concedes that it is difficult to know whether a taxpayer intends to return to his or her original domicile. The Department determines a taxpayer's intent through the information provided. In this case, the Taxpayers have the burden of proving that they changed their domicile. If the evidence is inadequate to meet this burden, the Tax Commissioner must conclude that the Taxpayer intended to return to his original domicile.
The Taxpayers performed a number of actions that are consistent with a change in domicile. They obtained an interest in a house in State A in August 1999. As of October 1, 1999, the husband was formally transferred to State A by his employer. This transfer was for a permanent position with no set limitation on the duration of the assignment. The Taxpayers also notified the local Virginia voter registrar in December 1999, that they changed their domicile to State A and requested that they be removed from the Commonwealth Voters List. They also purchased and registered automobiles in State A.
With regard to maintaining connections with Virginia, the Taxpayers claim that two automobiles in Virginia were used exclusively by their children and two others were used when they visited Virginia. In addition, the Taxpayers did not immediately register to vote in State A because there were no elections during the intervening period. In addition, although the Virginia licenses were retained, they were not renewed. The Taxpayers surrendered their Virginia driver's licenses in May 2000, to obtain State A licenses, approximately the same time that they registered to vote in State A.
The Department acknowledges that a change in domicile occurs as part of a process in which no single factor is dispositive. A person's true intention must be determined with reference to all of the facts and circumstances of the particular case. Based on the information presented, I find that the Taxpayers performed sufficient actions to establish their new domicile in State A by October 1, 1999. Accordingly, the assessment issued by the Department for the 1999 taxable year will be abated.
The Code of Virginia section cited, along with other reference documents, are available on-line in the Tax Policy Library section of the Department's web site, located at www.tax.virginia.gov. If you have any questions about this determination, you may contact ***** in the Department's Office of Policy and Administration, Appeals and Rulings, at *****.
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- Sincerely,
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- Kenneth W. Thorson
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AR/47628E
Rulings of the Tax Commissioner