Tax Type
Individual Income Tax
Description
Domicile of Virginia resident who moved overseas.
Topic
Residency
Date Issued
10-15-1985
October 15, 1985
Re: Section 58.1-1821 Application/Individual Income Tax
Dear ****
This refers to your letter of August 16, 1985, on behalf of ***** (Taxpayers), seeking correction of an assessment issued for taxable years 1976 through 1980.
FACTS
In May, 1975 Taxpayer moved from Virginia to Saudi Arabia where he was employed on an indefinite basis by ******. Upon leaving Virginia Taxpayer owned no real estate, transferred title of his automobile to his grandparents and left only a small amount of money in a checking account. The only other significant contact Taxpayer maintained with Virginia was his Virginia driver's license.
After setting up his residence there, Taxpayer acquired a Saudi Arabian licensed motor vehicle, a Saudi driver's license and handled all of his financial affairs in Saudi Arabia. Shortly thereafter, Taxpayer married and began to raise a family in Saudi Arabia. All taxes relating to his employment there were also paid to the government of Saudi Arabia.
Lastly, although he returned to Virginia at the conclusion of his job assignment in Saudi Arabia, and subsequently purchased a home here, Taxpayer asserts he had no such intention at the time he left for Saudi Arabia.
Therefore, Taxpayer contends that, based on all of the above, he left Virginia with the intent to permanently abandon Virginia domicile, and therefore, should not be held liable for Virginia income tax for the period covered by the audit.
DETERMINATION
§58.1-3O2 defines domicile as "the permanent place of residence of a taxpayer and the place to which he intends. to return even though he may actually reside elsewhere."
§630-2-302(3) of the Virginia Individual Income Tax Regulations, state 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." The regulations state further that "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 or failed to establish domicile in Virginia rests with the individual."
Based on all of the facts and circumstances of this case, Taxpayer has met the requirements for a change of domicile. Taxpayers transfer of all property owned in Virginia and removal of all but a small amount of funds from a Virginia checking account, combined with his establishment of a new residence in Saudi Arabia, paying taxes to the government of Saudi Arabia, and handling all of his financial affairs through his Saudi Arabia employer, show an unequivocal intent on his part to permanently abandon his residence in Virginia. and establish a new residence in Saudi Arabia. Therefore, based on all of the foregoing, I find basis for correction of the assessment in this case
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner