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 you (the “Taxpayer”) for the taxable year ended December 31, 2020.
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 2020 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 her income was taxable in Virginia. Based on the information received, the Department determined that the Taxpayer was taxable as a domiciliary resident of Virginia and issued an assessment. The Taxpayer applied for correction, contending she was a resident of ***** (State A) during 2020.
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 explains that she was raised in Virginia and remained here until she moved to ***** (State B) in March 2010. She lived and worked in State B until May 2019. In August 2019, she returned to Virginia and moved into her family’s Virginia residence. In December 2019, she began living and working in State A. In April 2021, she moved to ***** (State C) for employment and remained in State C until August 2022 when she returned to Virginia.
The Taxpayer explains that she had no intention of returning to Virginia when she left for State A and that she was working with a local loan officer to qualify to purchase a home there. She explains that she did not obtain a State A driver’s license or vehicle registration because State A’s motor vehicle services were disrupted during the COVID-19 pandemic. In addition, she states that her employer advised her to limit contact with the public because her work involved direct contact with COVID-19 patients. She did, however, file both her State A resident income tax return and her federal income tax return for the 2020 taxable year using her State A address.
The Taxpayer also retained several connections with Virginia. Specifically, she obtained a Virginia driver’s license and vehicle registration during the brief period of time she was present in Virginia in 2019. However, she did not register to vote in Virginia and was not registered to vote in any other state at that time.
As we consider the fact that the Taxpayer obtained a Virginia driver’s license and registered her vehicle, it should be understood that 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 they retain 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).
That said, the Department acknowledges that a determination of a change in domicile is evidenced by a process in which no single factor is dispositive such as a license or vehicle registration. In this case, it is unclear if the Taxpayer had the requisite domiciliary intent to reacquire a Virginia domicile in 2019 when she returned to her family home. After carefully considering all of the information presented, the Department finds that the Taxpayer adequately established her intent to abandon her Virginia domicile and establish domicile in State A as of December 2019. The fact that she retained her Virginia driver’s license and Virginia vehicle registration is understandable because of her professional responsibilities and the disruption of government services, especially during the earliest part of the COVID-19 pandemic in 2020. Accordingly, the Department finds that the Taxpayer was not taxable as a domiciliary resident of Virginia for the 2020 taxable year. The assessment, therefore, will be abated and any payments that were applied to the assessment will be refunded, including any applicable refund interest.
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 *****@tax.virginia.gov.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR/4885.Y