Tax Type
Individual Income Tax
Description
Taxpayers have proved that they abandoned their Virginia domicile
Topic
Domicile
Persons Subject to Tax
Taxpayers' Remedies
Date Issued
04-30-2008
April 30, 2008
Re: § 58.1-1821 Application: Individual Income
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, 2003.
FACTS
Prior to 1999, the Taxpayers resided in Virginia and owned a second residence in ***** (State A). They state that they moved to State A in 1999. In 2000, the Taxpayers relinquished their Virginia driver's licenses and acquired State A driver's licenses. They registered their cars and registered to vote in State A. The Taxpayers also continued to own a home in Virginia. For the 2003 taxable year, the Taxpayers filed a State A income tax return, but did not file a Virginia income tax return.
The Department received information from the Internal Revenue Service that tax documents for the 2003 taxable year were sent to the Taxpayers at a Virginia address. The Department requested additional information from the Taxpayers in order to determine their residence for that taxable year. The Taxpayers did not respond to the information requests. As such, the Taxpayer was assessed an individual income tax liability as a nonfiler for the 2003 taxable year.
The Taxpayers appeal the assessment and state they changed their Virginia domicile to State A prior to 2003, and therefore are not liable for Virginia income tax.
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 an individual or the place to which he intends to return even though he may actually reside elsewhere. For an individual to change his domiciliary residency to another state, that individual must intend to, abandon his Virginia domicile with no intention of returning to Virginia. Concurrently., that individual must acquire a new domicile, where that individual 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, maintain., a place of abode within Virginia, whether domiciled in Virginia or not.
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 consistent with abandoning domicile with Virginia prior to 2003. The Taxpayers relinquished their Virginia driver's licenses and obtained State A driver's licenses, registered their cars in State A and registered to vote in State A in 2000. The Taxpayers also filed State A resident income tax returns. In addition, the Taxpayers resided in Virginia less than 183 days during 2003.
The Taxpayers, however, continued to have their federal returns and other financial information sent to their Virginia address. The Taxpayers maintain that they frequently travel between Virginia and State A and believe the mail delivery at their Virginia address is more secure. In addition, the Taxpayer's adult children live near the Virginia residence and pick up their mail.
Based on the preponderance of evidence, I find that the Taxpayers have met their burden of showing that they abandoned their Virginia domicile and established a domicile in State A during the 2000 taxable year. Accordingly, the assessments of tax issued to the Taxpayers for the 2003 taxable year have been abated.
If you have any questions regarding this determination, you may contact ***** of the Department's Appeals and Rulings Unit at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-2052509612.B
Rulings of the Tax Commissioner