September 24, 2025
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond 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, 2019.
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 2019 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. Based on the information provided, the Department determined that the Taxpayer was subject to Virginia income tax as a domiciliary resident of Virginia and issued an assessment. The Taxpayer submitted an application for correction, contending he was a resident of ***** (State A) during 2019.
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 that person and the place to which that person intends to return even though they may be residing elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained their place of abode within Virginia. A Virginia domiciliary resident continues to be subject to Virginia taxation even if they work in another state or country. 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 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. See Cooper's Adm’r v. Commonwealth, 121 Va. 338, 347 (1917). The burden of proof that an individual has abandoned or failed to establish domicile in Virginia rests with the individual. See Title 23 of the Virginia Administrative Code (VAC) 10-110-30 B 3.
The determination of whether a change of domicile has occurred is highly dependent on the facts and circumstances of the individual case and no single factor is dispositive. Factors to be considered include, but are not limited to, the following:
sites of real and tangible property, location of savings and checking accounts, motor vehicle registration and licensing, motor vehicle operator’s license, voter registration, membership in clubs and civic groups, place of business, profession or employment, charitable contributions, location of schools attended by children, length of time of residence, place of birth and marriage, residence of family, reason for abandoning or acquiring domicile, and, in the case of a minor or married person, domicile of parents, husband, or wife and/or children. Id.
The Taxpayer was a domiciliary resident of State A since at least 2006. In connection with its examination of the Taxpayer’s residency for the 2008 and 2018 tax years, the Department observed that he had obtained a State A driver’s license, filed his federal returns with a State A address, and had no Virginia source income. During the 2019 taxable year he was employed at various locations within State A and stayed in hotels in State A during each project. In addition, he held a State A driver’s license from 2003 until it expired in 2019.
The Taxpayer obtained various connections with Virginia. He leased a residence in Virginia from May 2018 until May 2019. In addition, in 2019, he obtained a Virginia driver’s license and registered a vehicle in Virginia.
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 that individual 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).
As stated above, a change of domicile requires that a taxpayer prove two elements concurrently: 1) that they abandoned the old domicile and had no intent to return to it; and 2) that they established a new domicile, which must have been formed by physical presence coupled with the intent to remain permanently or indefinitely. In this case, the Taxpayer appears to have acquired a State A domicile in 2006. The Department effectively acknowledged this change in domicile when it concluded that he was not required to file a 2008 or 2018 Virginia resident return.
The Taxpayer’s acquisition of a Virginia driver’s license in 2019, however, would indicate an intent to establish domicile in Virginia. The Taxpayer explains that he obtained the license because his State A license was expiring and he could not renew it because he did not have a permanent physical address in State A. The Taxpayer also explains that he leased the Virginia residence so that his wife and stepdaughter could live near other family members. He never lived in the Virginia residence in 2019 and only made occasional visits totaling approximately 20 days.
Acquiring domicile in a new location requires both intent and personal presence. See Cooper’s Adm’r, 121 Va. at 347, in which the Virginia Supreme Court observed that neither physical presence alone nor expressed intention alone are sufficient to create a legal domicile for taxation purposes. The Department has determined that individuals cannot establish a domicile despite having some connections if they have not established a physical presence in the jurisdiction and the concurrent intention to remain there permanently or indefinitely. See P.D. 13-97 (6/11/2013), P.D. 15-4 (1/8/2015), and P.D. 23-110 (10/19/2023).
After carefully considering all of the evidence presented, the Department finds that the Taxpayer previously established domicile in State A and did not reestablish physical presence in Virginia with the concurrent intent to remain permanently or indefinitely prior to or during the 2019 taxable year. Although the Taxpayer made occasional visits to Virginia totaling approximately 20 days in 2019, temporary visits are not sufficient to establish the requisite intent to remain permanently or indefinitely despite the fact that the Taxpayer had established some connections to Virginia. See, e.g., P.D. 15-4. The assessment for the 2019 taxable year will, therefore, be abated.
While the Department concedes that the Taxpayer was not a resident of Virginia for the taxable year at issue, he should be aware that continuing connections with Virginia, such as possession of a Virginia driver’s license, will likely result in future contacts by the Department with respect to the situs of the Taxpayer’s domicile. As in any determination, a change in the facts and circumstances could result in a change in the Department’s determination in subsequent taxable years. In addition, the Taxpayer should be aware that Virginia law does not permit nonresidents to obtain Virginia driver’s licenses, and persons providing a false statement to an agency of the Commonwealth may be subject to penalty under Virginia law. See Virginia Code § 46.2-348.
The Code of Virginia sections and regulation cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact ***** in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at ***** or *****.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR 4742.Y