Document Number
Tax Type
Individual Income Tax
Taxpayer remained taxable as a domiciliary resident of Virginia for the entire taxable year.
Persons Subject to Tax
Filing Status
Date Issued

June 29, 2017

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, 2013.


The Taxpayer filed a part-year Virginia resident individual income tax return for the 2013 taxable year.  The return was selected for audit, and the Department requested further information to verify the Taxpayer's residency status for that year.  When a response was not received, the Department issued an assessment as if the Taxpayer had been a resident of Virginia for the entire year.  The Taxpayer appealed, contending he was a resident of ***** (State A) in 2013.


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 has abandoned his or her Virginia domicile. If the information is inadequate to meet this burden, the Tax Commissioner must conclude that he or she intended to remain indefinitely in Virginia.

The Taxpayer filed his 2013 federal income tax return and his Virginia part-year return using a Virginia address.  On the Virginia return, he listed his period of Virginia residency from January 1, 2013, to December 31, 2013.  The Taxpayer, however, attributed all of his income to a period of residency outside Virginia and claimed a full refund of Virginia income tax withheld from his wages.  Thus, the Virginia return contained several inconsistencies on its face.  The Taxpayer listed the entire year as his period of residency on a part-year return, which is meant only for individuals who resided in Virginia part of the year.  Also, he attributed all of his income to a period of residency outside Virginia when the return indicated he was a Virginia resident the entire year.

After the return had been selected for audit, the Department made a routine request for information pertaining to the Taxpayer's domicile.  When the Taxpayer failed to respond, an assessment was issued.  The Department's records indicate that in a subsequent conversation with the Department's auditor, the Taxpayer stated he did not need to complete the questionnaire.

When the Department received the Taxpayer's appeal, a similar questionnaire was mailed to the Taxpayer.  In his response, the Taxpayer listed his only Virginia connections as a condominium located in Virginia that he claims was leased to another party in 2013 and his parents' Virginia residence.  The questionnaire expressly asked the Taxpayer to provide the “driver's license history for yourself and your spouse for the past five years.”  It also asked “[have you or your spouse owned, or held an interest in, a business or income producing real property or tangible personal property in Virginia?”  The Department has learned that the Taxpayer registered a business with the Commonwealth's State Corporation Commission in August 2012, and reported a loss from the business on his 2013 federal income tax return.

The Department has also learned that the Taxpayer obtained a Virginia driver's license in August 2013.  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 fact that an individual has a Virginia driver's license is one factor to consider, among other possible factors, in any given domicile case.  Nonresidents are not permitted to hold Virginia driver's licenses.  See Va. Code § 46.2-323.1.  They are, however, permitted to continue to use their licenses from their home states or countries.  See Va. Code § 46.2-307. For the purposes of Title 46.2 of the Code of Virginia, “nonresident” is generally defined as every person who is not domiciled in the Commonwealth.  See Va. Code § 46.2-100.  Thus, in general, an individual must be a domiciliary resident of Virginia in order to hold a Virginia driver's license.

Individuals who have resided in Virginia more than six months, however, are deemed to be residents for purposes of applying most of the provisions of Title 46.2 of the Code of Virginia, including the driver's licensing provisions of Title 46.2, Chapter 3 (Va. Code § 46.2-300 et seq.).  In addition, because an individual who has been physically present and residing in Virginia for more than six months may nevertheless remain a domiciliary resident of another state or country, it may be necessary in such cases to examine additional factors to determine whether a person who has obtained a driver's license based on physical presence and actual residency in Virginia also intended to become a domiciliary resident of Virginia.  However, once it is clear that an individual has established domiciliary residency in Virginia, subsequent renewals of a Virginia driver's license even while absent from the state will be considered very strong evidence of the individual's intent to remain a domiciliary resident of Virginia.  That is because the basis of the individual's claim to be entitled to a Virginia driver's license would no longer be based on the length of time he was physically present in Virginia as an actual resident, but rather on the implication that he remained a domiciliary resident of Virginia.

In addition, the Taxpayer's filing history with Virginia is inconsistent with his status as a Virginia nonresident, as the Taxpayer claims to have been since 2013.  The Taxpayer filed Virginia resident returns in 2014 and 2015, and another part-year return in 2016, in each case claiming a refund for the entire amount of Virginia income tax withheld from his wages.

The extent of the Taxpayer's connections to State A in 2013 is unclear.  The Taxpayer states that he leased a personal residence in State A and was working on a business merger there, for nearly two years total.  The Taxpayer also claims to have obtained a State A voter's registration but has been unable to provide documentation regarding it.  In addition, the Taxpayer also claims that he filed a State A income tax return.

The Department informed the Taxpayer that State A does not impose a personal income tax and asked the Taxpayer to clarify why he stated that he paid income tax to State A.  The Taxpayer explained that he always filed an income tax return wherever he lived and worked and he did not pay attention to the particular rate he had to pay in any given state. The Department's question, however, had nothing to do with tax rates.  The fact remains that State A does not impose a personal income tax at all, and thus it is still unclear why the Taxpayer represented that he paid income tax to State A in 2013.

Virginia Code § 58.1-205 provides that in any proceeding relating to the interpretation of the tax laws of Virginia, an “assessment of a tax by the Department shall be deemed prima facie correct.”  As such, the burden of proof is on the Taxpayer to show he was not subject to income tax in Virginia.  As explained above, absence from a jurisdiction is not sufficient, by itself, to prove that a change of domicile occurred.  Even if the Taxpayer established domicile in State A, the information and evidence available fails to prove that he completely abandoned his Virginia domicile.  The Taxpayer had close family members in Virginia, owned a business and real property in Virginia, obtained a Virginia driver's license during the taxable year at issue, had Virginia income tax withheld from his wages and filed his federal and Virginia income tax returns using a Virginia address.

Therefore, the Department finds that the Taxpayer remained taxable as a domiciliary resident of Virginia for the entire 2013 taxable year.  Accordingly, the assessment is upheld.  The Taxpayer will receive an updated bill which will include accrued interest to date.  The Taxpayer should pay the balance due within 30 days of the bill date to avoid the accrual of additional interest and possible collections actions.

The Code of Virginia sections and public documents cited are available on-line at 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 *****.



Craig M. Burns
Tax Commissioner






Last Updated 10/02/2017 07:31