84-254 | Virginia Tax

Tax Type

Individual Income Tax

Description

Abandonment of Virginia domicile; Part-year return

Topic

Persons Subject to Tax

Residency

Date Issued

12-28-1984

December 28, 1984

Re: §58-1118 Application/Individual Income Tax

Dear ****************

This is in response to your letter of June 13, 1984 in which you make application for correction of the assessments for individual income tax against Your client for taxable years 1979, 1980 and 1981.

FACTS

The taxpayer departed Virginia in September 1979 to seek employment in Louisiana. Due to the nature of his work and as a matter of convenience, he continued to use his parent's Virginia address as a mailing address. Subsequently, he was contacted by the Virginia Department of Taxation concerning a discrepancy between the amount of federal adjusted gross income reported on his federal income tax return and the amount reported on his Virginia income tax return for 1979. An assessment was issued for additional income tax and interest for taxable year 1979.

The taxpayer moved back to Virginia in 1982 after he lost his job in Louisiana. In the course of resolving the question of his 1979 tax liability with the department, the taxpayer filed 1980 and 1981 Virginia income tax returns. He filed these returns based on the premise that he was a domiciliary resident of Virginia and an actual resident of Louisiana for the years in question.

Now the taxpayer states that he misunderstood the meaning of the terms "residency" and "domicile". He asserts that for the years 1979, 1980 and 1981 he was neither a domiciliary nor an actual resident of Virginia. He petitions for correction of the assessments for these three years.

DETERMINATION

The applicable controlling law is found in Virginia Code §58-151.02(e)(1)(iii), which indicates that a person who:

- ...changes his place of abode to a place without this State with the bona fide intention of continuing actually to abide permanently without this State shall be taxable as a resident for only that portion of the taxable year during which he was a resident of this State...

This Code Section requires that an individual meet two requirements to prove that he has changed his domicile. He must.

- 1. Change his place of abode to a place without Virginia, and
  2. Intend to continue to actually and permanently abide without Virginia.

The factual situation clearly indicates that Taxpayer did change his place of abode to a place without Virginia. He moved to Louisiana and was employed there continuously from 1979 to 1982

However, a taxpayer's intent is not as easily ascertained. "Intent must frequently be determined from the declarations and conduct of the person in light of the attending circumstances", stated the court in State Planters Bank v. Commonwealth of Virginia 174 Va. 289, 6 S.E. 629 (1940). Virginia Code §58-151.02(e)(1)(iii) provides guidance for the department, when determining which elements should be considered, when the intent of a taxpayer is at issue:

- In determining domicile, consideration may be given to the applicant's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, business pursuits, employment, income sources, residence for federal income tax purposes, marital status, residence of parents, spouse and children, if any, Leasehold, sites of personal and real property owned by the applicant, motor vehicle and other personal property registrations, residence for purposes of voting as proven by registration to vote, if any, and such other factors as may reasonably be deemed necessary to determine the person's domicile.

Even though the taxpayer's family home is in Virginia, and after he lost his job in Louisiana he returned to Virginia; this, by itself, is not sufficient to show that his intent at the time that he moved from Virginia was not to permanently abide elsewhere. Both, his move away from Virginia and his move back to Virginia, were motivated by his desire to seek gainful employment.

The taxpayer has presented sufficient factual evidence in his Statement of Intent", which he attached to his application for correction, to support his contention that his intention was to permanently abide outside of Virginia.

Based on the facts presented, we find that the taxpayer met the two requirements necessary to show that he was neither a domiciliary nor an actual resident of Virginia in 1980 and 1981. He was, however, a part-year resident of Virginia in 1979. Therefore, the 1980 and 1981 assessments will be abated in full upon receipt of a properly completed 1979 Virginia Part Year Individual Income Tax Return.

Sincerely,

W. H. Forst
State Tax Commissioner

Rulings of the Tax Commissioner