Tax Type
Individual Income Tax
Description
Out-of-state tax credit; Northern Marian Islands
Topic
Credits
Date Issued
06-06-1985
June 6. 1985
RE: §58.1-1821 Application/Individual Income Tax
Dear ****
This will reply to your letter of April 12, 1985, requesting abatement of an assessment in the above referenced case for taxable year 1982.
Facts
Taxpayer, a Virginia resident, claimed an out-of-state tax credit for taxes paid to the Commonwealth of Northern Mariana Islands (CNMI) while residing there in 1982. Taxpayer claims that such taxes as were paid should be allowed as a credit against his Virginia tax liability since CNMI is a territory of the U.S. even though it has not been granted the status of statehood.
Taxpayer submits that taxes paid to CNMI should be treated the same as taxes paid to the District of Columbia, which has also never been granted the status of statehood.
Taxpayer also seeks advice on the correct filing procedures for persons like himself who maintain ownership of a home in Virginia while stationed abroad in Territories such as CNMI.
Determination
§58.1-332 of the Virginia Code provides generally for a credit for income tax paid "to another state" to residents and non-residents who are liable for Virginia income tax, subject to certain limitations and restrictions.
As used in this section, the word "state" means "any state of the United States and the District of Columbia". See § 630-2-302(E) of the Virginia Individual Income Tax Regulations.
The Commonwealth of the Northern Mariana Islands, while a "territory" of the United States, is not the equivalent of a state of the United States within the meaning of the Code Section cited above.
"Territorial possessions [of the U.S.], may be defined as all lands acquired by the U.S. by treaty or purchase which have not become an integral part of the United States, or incorporated into the United States." Rasmussen v. U.S. 197 U.S. 516, 25 S.C. 514. (Emphasis added) 603(a) of the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the U.S. itself states, "the Northern Mariana Islands will not be included within the territory of the United States." (Emphasis added) Therefore, the credit provisions cited above do not apply to income tax paid by taxpayer in the present case to CNMI.
Taxpayer also inquires as to his correct filing status while he was stationed on CNMI. Taxpayer states that while he maintained ownership of his home, he did not vote in Virginia, keep a motor vehicle in Virginia, or meet any other test of domiciliary residence in Virginia, for the duration of his stay on CNMI.
§ 630-2-302 of the Virginia Individual Income Tax Regulations defines resident as "(l? any individual domiciled in this State (domiciliary resident), and (2) any individual who is not domiciled in this State but who maintains a place of abode (actual resident) in Virginia for more than 183 days (in the aggregate) during the taxable year."
The Regulations state further that "Any person who has not moved from the State with the intention of permanently residing outside of Virginia is still a domiciliary resident even though he may be actually living some place else." And, "domicile, once established continues until the individual moves to a new location with the bona fide intention of making his fixed and permanent home there." The determination of bona fide intention to change one's domicile is a factual matter which must be resolved on a case by case basis. "No single factor is dispositive in determining domicile; rather the factors are examined collectively to determine if the intent to acquire or abandon Virginia domicile exists. A simple declaration of intent to abandon domicile, or physical presence elsewhere is insufficient to abrogate Virginia domicile." And, the burden of proving that "an individual has abandoned domicile in Virginia rests with the individual."
Although taxpayer has presented some facts which standing alone might show an intention to abandon Virginia domicile, when these facts are examined collectively with the other facts presented, intent to abandon Virginia domicile has not been established.
For example, taxpayer states that he did not vote in Virginia during his stay on CNMI, but does not state whether he maintained his voter registration status in Virginia. In addition, taxpayer states he did not keep a motor vehicle in Virginia, but does not state whether he maintained his Virginia motor vehicle operators license, or motor vehicle registration. Most importantly, taxpayer admits to having maintained ownership of a home in Virginia, and therefore, presumably paid local property tax on such home throughout his stay on CNMI. Lastly, the mere fact that taxpayer paid taxes to CNMI does not abrogate his Virginia domicile for Virginia individual income tax purposes.
Therefore, taxpayer has not met the burden of proving that he moved to CNMI with the intent of abandoning domicile in Virginia, and is not entitled to file as a Virginia nonresident. Accordingly, taxpayer filed correctly when he filed as a Virginia domiciliary resident.
Based on all of the foregoing, I find no basis to adjust the assessment in this case, the entire amount of which is hereby due and payable.
Sincerely,
W. H. Forst
Tax Commissioner
RE: §58.1-1821 Application/Individual Income Tax
Dear ****
This will reply to your letter of April 12, 1985, requesting abatement of an assessment in the above referenced case for taxable year 1982.
Facts
Taxpayer, a Virginia resident, claimed an out-of-state tax credit for taxes paid to the Commonwealth of Northern Mariana Islands (CNMI) while residing there in 1982. Taxpayer claims that such taxes as were paid should be allowed as a credit against his Virginia tax liability since CNMI is a territory of the U.S. even though it has not been granted the status of statehood.
Taxpayer submits that taxes paid to CNMI should be treated the same as taxes paid to the District of Columbia, which has also never been granted the status of statehood.
Taxpayer also seeks advice on the correct filing procedures for persons like himself who maintain ownership of a home in Virginia while stationed abroad in Territories such as CNMI.
Determination
§58.1-332 of the Virginia Code provides generally for a credit for income tax paid "to another state" to residents and non-residents who are liable for Virginia income tax, subject to certain limitations and restrictions.
As used in this section, the word "state" means "any state of the United States and the District of Columbia". See § 630-2-302(E) of the Virginia Individual Income Tax Regulations.
The Commonwealth of the Northern Mariana Islands, while a "territory" of the United States, is not the equivalent of a state of the United States within the meaning of the Code Section cited above.
"Territorial possessions [of the U.S.], may be defined as all lands acquired by the U.S. by treaty or purchase which have not become an integral part of the United States, or incorporated into the United States." Rasmussen v. U.S. 197 U.S. 516, 25 S.C. 514. (Emphasis added) 603(a) of the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the U.S. itself states, "the Northern Mariana Islands will not be included within the territory of the United States." (Emphasis added) Therefore, the credit provisions cited above do not apply to income tax paid by taxpayer in the present case to CNMI.
Taxpayer also inquires as to his correct filing status while he was stationed on CNMI. Taxpayer states that while he maintained ownership of his home, he did not vote in Virginia, keep a motor vehicle in Virginia, or meet any other test of domiciliary residence in Virginia, for the duration of his stay on CNMI.
§ 630-2-302 of the Virginia Individual Income Tax Regulations defines resident as "(l? any individual domiciled in this State (domiciliary resident), and (2) any individual who is not domiciled in this State but who maintains a place of abode (actual resident) in Virginia for more than 183 days (in the aggregate) during the taxable year."
The Regulations state further that "Any person who has not moved from the State with the intention of permanently residing outside of Virginia is still a domiciliary resident even though he may be actually living some place else." And, "domicile, once established continues until the individual moves to a new location with the bona fide intention of making his fixed and permanent home there." The determination of bona fide intention to change one's domicile is a factual matter which must be resolved on a case by case basis. "No single factor is dispositive in determining domicile; rather the factors are examined collectively to determine if the intent to acquire or abandon Virginia domicile exists. A simple declaration of intent to abandon domicile, or physical presence elsewhere is insufficient to abrogate Virginia domicile." And, the burden of proving that "an individual has abandoned domicile in Virginia rests with the individual."
Although taxpayer has presented some facts which standing alone might show an intention to abandon Virginia domicile, when these facts are examined collectively with the other facts presented, intent to abandon Virginia domicile has not been established.
For example, taxpayer states that he did not vote in Virginia during his stay on CNMI, but does not state whether he maintained his voter registration status in Virginia. In addition, taxpayer states he did not keep a motor vehicle in Virginia, but does not state whether he maintained his Virginia motor vehicle operators license, or motor vehicle registration. Most importantly, taxpayer admits to having maintained ownership of a home in Virginia, and therefore, presumably paid local property tax on such home throughout his stay on CNMI. Lastly, the mere fact that taxpayer paid taxes to CNMI does not abrogate his Virginia domicile for Virginia individual income tax purposes.
Therefore, taxpayer has not met the burden of proving that he moved to CNMI with the intent of abandoning domicile in Virginia, and is not entitled to file as a Virginia nonresident. Accordingly, taxpayer filed correctly when he filed as a Virginia domiciliary resident.
Based on all of the foregoing, I find no basis to adjust the assessment in this case, the entire amount of which is hereby due and payable.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner