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 response received and the information otherwise available, the Department determined that the Taxpayer was taxable as a domiciliary resident of Virginia and issued an assessment. The Taxpayer applied 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 explains that he lived and worked in Virginia from 2006 until 2009 when he and his spouse purchased a residence in State A and began living there. In 2010, the Taxpayer returned to Virginia while his spouse remained in State A. Subsequently, the Taxpayer retired and returned to State A in January 2019. He insured a vehicle in State A in 2019 but did not obtain a State A driver’s license until 2024. The Taxpayer sold his State A residence in 2020 and purchased a residence in ***** (State B). The Taxpayer lived in the State B residence until it was sold in August 2022. Since that time, the Taxpayer has lived in a residence owned by a family member in State A.
The Taxpayer, however, retained some connections to Virginia. He maintained a Virginia driver’s license which he renewed in 2018. He also owned a Virginia residence from 2006 through 2024 and explains that he continued to spend a significant amount of time there after his retirement in order to care for an elderly family member and to visit family in general. In addition, tax-reporting documents such as 1099-Rs were also sent to his Virginia residence.
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).
The Taxpayer explains that he did not get a State A driver’s license because he had just renewed his Virginia driver's license in 2018. Although the Taxpayer did eventually obtain a State A driver’s license in 2024, this action was subsequent to the Department’s residency audit and is thus less persuasive evidence of intent. See P.D. 13-161 (8/13/2013), P.D. 17-97 (6/12/2017), and P.D. 24-36 (12/13/2024). In addition, the Taxpayer states that he did not change his address on his tax-reporting documents because he conducted his affairs electronically.
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, even if the Taxpayer intended to establish a new domicile in State A, his ongoing connections with Virginia raise significant doubts as to his intent to abandon his Virginia domicile.
In addition, because the Taxpayer twice failed to return the residency questionnaire sent to him by the Department’s Tax Adjudication and Resolution Division (“Adjudication”), information concerning other relevant factors such as vehicle registrations, voter’s registrations, memberships in clubs or civic groups, and business connections is missing. Further, the questionnaire also requested information concerning the number of days the Taxpayer was present in Virginia in 2019. This information was specifically requested again by Adjudication staff but a response was never received. Accordingly, the Department was unable to evaluate whether or not the Taxpayer was an actual resident of Virginia in 2019.
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 Taxpayers to show they were not subject to income tax in Virginia. Furthermore, Virginia Code § 58.1-1826 precludes a court from granting relief to taxpayers seeking correction of erroneous state tax assessments in cases in which the erroneous assessment is attributable to the taxpayers’ willful failure or refusal to provide the Department with necessary information as required by law.
The Department acknowledges that a determination of a change in domicile is evidenced by a process in which no single factor is dispositive. After carefully considering the information presented, the Department finds that the Taxpayer has failed to prove that he abandoned his Virginia domicile as of the 2019 taxable year. Therefore, he remained subject to income tax as a domiciliary resident of Virginia.
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 2019 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 and Legal Affairs, Tax Adjudication and Resolution Division, P.O. Box 27203, Richmond, Virginia 23261-7203, Attention: *****. The return will be reviewed and processed, and the assessment will be adjusted, as warranted. If the return is not received within the allotted time, the assessment will be considered to be correct.
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/4720.Y