August 16, 2019
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, 2014.
FACTS
The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2014 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 in order to determine if his income was taxable in Virginia. When a response was not received, the Department issued an assessment. The Taxpayer appeals, contending he was a resident of ***** (State A).
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia 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 Department must conclude that he or she intended to remain indefinitely in Virginia.
The Taxpayer was a student at a United States military academy from July 2010 to June 2014. The Taxpayer explains that his father established residency in State A in March 2013. The Taxpayer claims that he left the academy temporarily in 2013 because of a government shutdown and went to State A. It is from this time that the Taxpayer apparently believes his period of State A residency began. After graduation, the Taxpayer states that he served in a period of deployment from September 2014 to April 2015 and returned to his parents’ residence in State A. The Taxpayer also states that he returned to State A after subsequent ship tours.
The information provided indicates that the Taxpayer did not obtain a State A driver’s license or State A voter’s registration until April 2015. The Taxpayer also retained some connections to Virginia. It appears that his mother remained at the family’s Virginia residence throughout 2014. The Taxpayer also retained his Virginia driver’s license until April 2015.
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 provided a number of documents to support his change of domicile. Most of these documents evidence one of his parent’s change of employment, permanent place of abode and driver’s license to State A. As a legal adult, the Taxpayer has provided no official document of his desire to change until he obtained a State A driver’s license in 2015. On the remaining documents, forms and a resume, the Taxpayer used a State A address. While mailing addresses can be an indication of residency, merely listing an address on a form is not definitive.
A change of domicile requires physical presence together with evidence that the individual concurrently intended to remain in that jurisdiction at that particular time. Mere temporary stays with an intent to return at some future, undetermined time do not satisfy the establishment element of the change of domicile test. An intent to return at some unspecified later date is not equivalent to an intent to remain permanently or indefinitely in the present time. See P.D. 17-97 (6/12/2017).
The Department finds it doubtful that the Taxpayer could have changed his domicile while the school he was attending was closed temporarily even though he did spend time in State A. While the shutdown may have technically been indefinite, the Taxpayer states that he would return to school as soon as the government shutdown was over. This statement directly contradicts the Taxpayer’s claim that he intended to remain in State A.
Further, it has been the Department’s experience that college students rarely establish domicile where they attend college. See P.D. 82-39 (4/2/1982) and P.D. 11-121 (6/30/2011). As such, most college students will remain domiciled where they were domiciled at the time they entered college. It would also be highly unusual for a college student to establish domicile in any other location while being a student, unless they can show by clear evidence they were physically present in a location with the present intention to remain permanently or indefinitely.
For example, if the student travelled to another state for summer employment, in most cases the student would not have the present intention to remain at that location permanently or indefinitely because the student would be returning to school to continue his studies upon the completion of such employment. The student may intend to return to that location upon graduation, but until he does so and the circumstances indicate he intends to remain there permanently or indefinitely from that point forward, a change of domicile is not considered to have occurred.
Further, the Taxpayer’s other parent continued to live in Virginia in 2014, and he spent more time in Virginia than State A in 2014. He also retained his Virginia driver’s license until 2015. Even if the Taxpayer could have established domicile in State A in 2013, these facts raise doubts as to whether the Taxpayer truly intended to abandon his Virginia domicile at that time. As stated above, a change of domicile requires the abandonment of the old domicile concurrent with the establishment of a new domicile.
The Department acknowledges that a change of domicile occurs as part of a process in which no single factor is dispositive. After carefully considering all of the evidence presented, I find that the Taxpayer has not presented sufficient evidence that he abandoned his Virginia domicile and established domicile in State A at any point prior to or during the 2014 taxable year. Accordingly, he remained taxable as a domiciliary resident of Virginia that year.
The assessment at issue was made based on the best information available to the Department pursuant to Virginia Code § 58.1-111. The Taxpayer may have information that better represents his Virginia income tax liability for the year at issue. Therefore, the Taxpayer should file a 2014 Virginia resident income tax return. The return should be submitted within 30 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *****. Upon receipt, the return will be reviewed and assessment will be adjusted, as appropriate. If the return is not received within the allotted time, the assessment will be considered to be correct.
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/1986.M