June 24, 2016
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, 2012.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia individual income tax return for the 2012 taxable year. A review of the Department's records showed that the Taxpayer had not filed a return. The Department requested additional information from the Taxpayer to determine if her income was subject to Virginia individual income tax. When the Taxpayer did not respond to the information request, the Department issued an assessment. The Taxpayer appeals, contending she was a resident of ***** (State A) during the taxable year at issue.
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 reside elsewhere. For a person to change domiciliary residency to another state or country, 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, situs of real or 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 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 abandoned his or her Virginia domicile. If the information is inadequate to meet this burden, the Department must conclude that he or she intended to remain indefinitely in Virginia.
Prior to 2009, the Taxpayer was a domiciliary and actual resident of Virginia. Subsequently, the Taxpayer accepted employment in State A and began living there.
The Taxpayer also maintained connections with Virginia. The Taxpayer received her mail at a post office box in Virginia and filed her 2012 federal income tax return using that address. The Taxpayer also continued to register her vehicles in Virginia, including a new vehicle that she registered in 2012. In addition, the Taxpayer retained her Virginia 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.” In fact, this section states that every person applying for a driver's license must execute and furnish to the Commissioner of the Department of Motor Vehicles (DMV) a statement that certifies that the applicant is a Virginia resident. The Department has found that an individual may successfully establish a domicile outside Virginia even if he retains a Virginia driver's license. See Public Document (P.D.) 00-151 (8/18/2000). However, obtaining or renewing a Virginia driver's license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/9/2002).
The Taxpayer states that she did not have a stable address and wanted a post office box to make sure she received her mail. She states that she just happened to be in Virginia when she opened the post office box.
The Department acknowledges that a change in domicile occurs as part of a process in which no single factor is dispositive. The Taxpayer states that she was a visiting professor in State A. In the Department's experience, such employment arrangements are usually temporary in nature. The Taxpayer has presented no evidence that she established a permanent place of abode in State A or any other connections that may indicate an intent to establish domiciliary residence in State A, such as obtaining a driver's license, vehicle registration or voter's registration. The Taxpayer, however, did maintain several of those connections with Virginia. In addition, she was still receiving her mail in Virginia. As such, the preponderance of the evidence indicates that the Taxpayer had not abandoned her Virginia domicile. Accordingly, I find that the Taxpayer remained taxable as a domiciliary resident of Virginia for the 2012 taxable year.
The Department's assessment was based on the information available. The Taxpayer, however, may have additional information to more accurately reflect her Virginia income tax liability. As such, the Taxpayer may file a 2012 Virginia resident individual income tax return. The return should be mailed to: Virginia Department of Taxation, P.O. Box 27203, Richmond, Virginia 23261-7203, Attention: *****, within 30 days from the date of this letter. Once the return is received, it will be processed and the assessment adjusted accordingly. If the return is not filed within the time allotted, the assessment will be upheld and collection actions will resume. The Taxpayer should be aware that if she wishes to claim a credit for income tax paid to State A, she should attach a copy of her State A return.
The Code of Virginia sections and public documents cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department's web site. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1-6257242283.M