09-128 | Virginia Tax

Tax Type

Individual Income Tax

Description

Taxpayer did not abandon his domiciliary resident in Country A for the year in question.

Topic

Domicile

Persons Subject to Tax

Date Issued

09-08-2009

September 8; 2009

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, 2004. I apologize for the delay in responding to your letter.

FACTS

The Taxpayer moved from ***** (State A) to ***** (Country A) in 2000 for employment purposes. He took sufficient steps to abandon his State A domicile and acquire a Country A domicile in 2000. He did have federal tax information mailed to a Virginia residence. In addition, the Taxpayer obtained a Virginia driver's license in March 2003. Under audit, the Department determined that the Taxpayer was a domiciliary resident of Virginia in 2004, and issued an assessment for tax and interest. The Taxpayer contests the assessment, asserting he was not a resident of Virginia.

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. 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.

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 The taxpayer has the burden of proving that he or she has abandoned his or her original domicile. If the information is inadequate to meet this burden, the Commissioner must conclude that the taxpayer did intend to return to his or her original domicile.

The evidence clearly shows that the Taxpayer established his domicile in Country A in 2000. In order to establish a domiciliary resident for Virginia for 2004, the Taxpayer would have to both abandon his domicile in Country A and take sufficient steps to acquire a Virginia domicile. The facts show that the Taxpayer did not take any steps to abandon his Country A domicile in 2004.

The Taxpayer states he used his sister's address to receive mail because the mail service is poor in Country A. The Taxpayer did travel into the United States for 16 days, part of which was spent in Virginia visiting his sister. According to the Taxpayer, he found it convenient to have federal tax information to be sent to the Virginia address. Under such circumstances, this activity could not be considered an expression of intent to acquire domicile in Virginia.

The Taxpayer also acquired a Virginia driver's license using his sister's Virginia residence as his residential address. The Taxpayer states he acquired the Virginia driver's license as a convenience for when he visits the United States. 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 license 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 Taxpayer argues that he did not intend to establish Virginia domicile by obtaining a driver's license, and he allowed it to expire in April 2007 after being contacted by the Department.

The evidence overwhelmingly shows that the Taxpayer did not abandon his domiciliary resident in Country A for the 2004 taxable year. Thus, even though he obtained a Virginia driver's license, this evidence alone is not sufficient to show he established a Virginia domicile in 2004. Accordingly, the assessment has been abated.

The Code of Virginia sections and public document cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions regarding this determination, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.

- - - - Sincerely,

- - - - Janie E. Bowen
        Tax Commissioner

AR/1-2479596576.B

Rulings of the Tax Commissioner