Document Number
Tax Type
Individual Income Tax
Taxpayer failed to abandon Virginia domicile for the taxable year and is subject to tax
Persons Subject to Tax
Taxable Income
Date Issued

May 22, 2008

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 assessments issued to ***** (the "Taxpayer") for the 2004 taxable year.


Prior to 2001, the Taxpayer and his wife resided in Virginia. In February 2001, the Taxpayer accepted a position with a corporation located in ***** (State A). Pursuant to this job, the Taxpayer leased a residence in State A. The Taxpayer continued to jointly own a home in Virginia where his wife lived during 2004. The Taxpayer maintained his Virginia driver's license and voter registration. In addition, the Taxpayer had three vehicles registered in his name in Virginia.

The Taxpayer did not file a Virginia income tax return for the 2004 taxable year. Under audit, the Department determined that he was a Virginia resident and assessed Virginia income tax, penalty, and interest. The Taxpayer contends that he was a domiciliary resident of State A during the taxable year at issue. The Taxpayer also argues that penalty should be waived because he relied on his accountant's advice regarding domicile.



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 or in another 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) 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.

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 residency.

The Department determines a taxpayer's intent through the information provided A 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 Commissioner must conclude that he or she intended to remain indefinitely in Virginia.

The Taxpayer performed two actions consistent with changing domicile to State A. He accepted a full-time, permanent position with a company located in State A and leased a residence in State A. The Taxpayer, however, performed numerous actions that are consistent with maintaining a Virginia domicile. The Taxpayer maintained a Virginia driver's license during the taxable year at issue. His cars were registered in Virginia. He jointly owned a residence with his wife in Virginia. He was registered to vote in Virginia and his informational returns were sent to Virginia residence.

The Taxpayer concedes that he maintained a Virginia driver's license, but that he has since acquired a State A driver's license. Virginia Code § 46.2-323.1 states, "No driver's license . . . shall be issued to any person who is not a Virginia resident." The Department has ruled that obtaining or renewing a Virginia licenses is a strong indicator of an individual's intent to be a domiciliary resident of Virginia. See Public Document (P.D.) 02-149 (12/09/2002). The Department has also found that an individual may successfully establish a domicile outside Virginia even if they retain a Virginia driver's license. See P.D. 00-151 (8/18/2000). In this case, however, the Taxpayer renewed his Virginia driver's license twice, once in March 2001 and again in March 2006, after he began residing in State A. The renewal of a Virginia driver's license is considered to be a strong declaration of intent to maintain a Virginia domicile.

The Taxpayer contends that he believed he cancelled his Virginia voter registration by moving to State A. While the Taxpayer may have believed that his Virginia voter registration was cancelled when he moved to State A, he failed to register to vote in State A. This raises further doubts as to the Taxpayer's intent to change his domicile.

The Taxpayer contends that his wife stayed in the Virginia residence in order to support their children through their post-secondary education, after which she would join him in State A. The Taxpayer states that it was important for either he or his wife to remain in close proximity to provide ongoing support. These reasons reveal the Taxpayer's desire to maintain his connections with Virginia.

The Taxpayer avers that his informational returns were sent to the Virginia residence because they were either for joint investments with his wife or they had always been sent to the Virginia address. While not a strong indicator of intent, when considered with other evidence, it can be indicative of domiciliary intent.


The Taxpayer requests that the late payment penalty be abated because he made a good faith effort to change his domicile from Virginia to State A following a consultation with his certified public accountant (CPA). Virginia Code § 58.1-105 grants the Tax Commissioner authority to waive penalty for reasonable cause.

In a situation where a taxpayer relies on his accountant, lawyer, or tax preparer, and the accountant, lawyer, or tax preparer provides inaccurate or erroneous advice that results in a penalty, the taxpayer has recourse against the accountant, lawyer, or tax preparer for the error. The Department will not consider such circumstances as reasonable cause to waive a penalty. Accordingly, the Taxpayer's request for the waiver of penalty is denied.


After careful consideration of all the information provided, I find that the weight of the evidence shows that the Taxpayer failed to abandon his Virginia domicile for the 2004 taxable year. Therefore, the Taxpayer was subject to Virginia individual income tax.

A revised bill, with interest accrued to date, will be sent to the Taxpayer. No additional interest will accrue provided the outstanding balance in paid within 30 days from the date of the revised bill.

The Code of Virginia sections and public documents cited, along with other reference documents, are available on-line at in the Tax Policy Library section of the Department's web site. If you have any questions about this determination, you may contact ***** at *****.
                • Sincerely,

                • Janie E. Bowen
                  Tax Commissioner


Last Updated 08/25/2014 16:46