Document Number
Tax Type
Individual Income Tax
Servicemembers Civil Relief Act p
Servicemembers Civil Relief Act
Persons Subject to Tax
Date Issued

April 14, 2015

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 taxable years ended December 31, 2010 through 2013.  I apologize for the delay in responding to your appeal.


The Taxpayer, the wife of an active duty military service member, moved to Virginia in 2009, when the service member was assigned to a Virginia duty station.  The Taxpayer filed Virginia Special Nonresident Claims for Individual Income Tax Withheld (Form 763S) for taxable years 2010 through 2012 and received a refund of Virginia withholding for each year at issue.

Under review, the Department determined that the Taxpayer was a domiciliary resident of Virginia and her income was subject to Virginia's income tax.  The Department issued assessments for taxable years 2010 through 2012.  The Taxpayer appeals the assessments, contending that she is exempt from Virginia income tax under the Servicemembers Civil Relief Act (the "Act").  In addition, the Taxpayer argues that she did not abandon her domiciled state of ***** (State A), and she is in Virginia solely to be with the service member.



The Act, codified at U.S.C. § 571 et seq., was amended effective for the 2009 taxable year and thereafter, to provide that a spouse can neither lose nor acquire domicile or residence in a state when the spouse is present in the state solely to be with the service member in compliance with the service member's military orders if the residence or domicile is the same for both the service member and spouse.  The Act does not apply to the spouses of military and naval personnel who have established domiciliary status within Virginia.  In Virginia Tax Bulletin (VTB) 10-1 (1/29/2010), the Department explained that the domicile of a military spouse must be the same as the service member in order to be exempt from Virginia's income tax.  The determination of a military spouse's domicile requires analysis of the facts and circumstances.  The elements that may be examined include:

1.     Whether the person claiming exemption is married to a service member who is present in Virginia pursuant to military orders.

2.        The service member's domicile.

3.        The spouse's domicile and the circumstances in which it was established.

4.        The extent to which the spouse has maintained contacts with the domicile.

5.        Whether the spouse has taken any actions in Virginia that are inconsistent with maintaining a domicile elsewhere.

In general, the Department will not seek to tax the spouse of a military service member so long as the spouse maintains sufficient connections with the service member's domiciliary state to indicate intent to maintain domicile there.  Such connections would include obtaining and retaining a driver's license, registering to vote and voting in local elections, registering an automobile, and exercising other benefits or obligations of a particular state.  As long as the spouse of a military service member maintains such connections, he or she would be considered to be a resident of the other state even though they work, live, and establish a place of abode in Virginia.

When a spouse moves to follow military personnel to a new duty station, they will generally abandon their former personal property and move the family.  The spouse will establish a new permanent place of abode near the new duty station, enroll children in school, and seek employment of an indeterminate duration.  The spouse will generally comply with jurisdictional authorities with regard to driving permits, vehicle registrations, voting registrations, and education requirements.  The spouse will also change social, charitable and church associations.  Moreover, the military service member and the spouse move with no assurance that they may move back to a former duty station.

Under these circumstances, it seems reasonable to conclude that a military spouse will establish domicile in Virginia when following military personnel to Virginia, and abandon Virginia domicile when following them to the next duty station.  To do otherwise would require the Department to investigate whether a military spouse had established domicile and abandoned domicile at every duty station prior to coming into Virginia.  Further, when a military spouse is determined to have changed their domicile to Virginia prior to 2009, they will continue to be considered to be Virginia domiciliary residents until he or she takes sufficient actions to abandon their Virginia domicile and establish their domicile elsewhere.  See Public Document (P.D.) 10-32 (4/08/2010).

In this case, the service member's state of record was State A.  The Taxpayer claims she was a domiciliary resident of State A and contends she took no actions inconsistent with her retaining this domicile while living in Virginia.  While the Taxpayer indicates she has lived in State A, she appears to have been residing in ***** (State B) when she married the servicemember and moved with him to four duty stations, none of which was in State A, prior to moving to Virginia in 2009.  Further, the Taxpayer has provided no evidence to show she maintained domiciliary connections in State A.

In addition, the Taxpayer performed a number of actions in Virginia that are inconsistent with maintaining a domicile elsewhere. These actions included establishing a permanent place of abode, engaging in a job with a Virginia employer, registering to vote and obtaining a Virginia driver's license.


Because the Department issued the refunds for four years, the Taxpayer questions why the Department failed to notify her of the residency issue earlier.  Virginia receives approximately 3.5 million individual income tax returns per year and only a small portion of the individual taxpayers can be audited or reviewed.  Like the federal tax regimen, Virginia's taxing system is based largely on the concept of self-assessment.  A taxpayer computes his own income tax, completes his own return, files the return, and pays the tax indicated.  Virginia has implemented a self-assessment system based on the federal system because it is less intrusive upon taxpayers, simpler, and less costly to administer.  Thus, the fact that a return has not been reviewed by the Department does not mean it is correct or accurate.

Further, Virginia Code § 58.1-104 generally requires the Department to make an assessment of underpaid tax within three years from the last day prescribed by law for the timely filing of the return.  Therefore, the Department is granted three years to conduct a review and issue an assessment on a timely filed return.


Based on the information provided, it is my determination that the Taxpayer is a domiciliary resident of Virginia.  As such, the Taxpayer is ineligible for the protections granted under the Act.

The Department's assessments are based on the information available on the Taxpayer's claims of refund.  The Taxpayer may have additional information to more accurately reflect her Virginia tax liability.  As such, the Taxpayer is requested to file Virginia resident income tax returns for the 2010 through 2013 taxable years.  The returns should be filed within 30 days from the date of this letter and mailed to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, attention *****, P.O. Box 27203, Richmond, Virginia 23261-7203.

The requested returns will be processed and the assessments adjusted accordingly.  If the returns are not filed, the assessments will be considered to be correct and updated bills, with additional accrued interest, will be issued.

The Code of Virginia sections, tax bulletin and public document cited are available on­line at in the Laws, Rules & Decisions section of the Department's web site.  If you have any questions regarding this determination, you may contact ***** at *****.  


Craig M. Burns
Tax Commissioner





Rulings of the Tax Commissioner

Last Updated 04/29/2015 15:32