Tax Type
Individual Income Tax
Description
Abandonment of domicile
Topic
Residency
Date Issued
02-08-1985
February 8, 1985
Re: §58-1118 Application/Individual Income Tax
Dear ***************
This will reply to your letter of November 9, 1984 in which you submit an application for correction of individual income tax assessed to for taxable year 1980.
FACTS
****** (hereinafter "Taxpayer") changed his place of abode from Virginia to Nigeria in April 1979 in order to take employment with the ***** there. In order to enter Nigeria, the taxpayer obtained a three-year visa which subjected him to Nigerian taxation. One requirement of such visa was a statement of intent to remain in the country. The taxpayer's employment was in connection with a five-year construction contract between ***** and Nigeria. Upon the abrupt cancellation of that contract in 1980, the taxpayer's employment was terminated and he returned to the United States.
While employed in Nigeria, the taxpayer's family remained in Virginia at his previous residence. The taxpayer also maintained his registration to vote in Virginia and his Virginia driver's license while employed in Nigeria.
Virginia income tax was assessed to the taxpayer for taxable year 1980 as a full-year resident. The taxpayer contests such assessment on the basis that he had abandoned his Virginia domicile to take employment in Nigeria and should therefore only be subject to Virginia tax as a part-year resident on income derived after his return to the state in 1980.
DETERMINATION
At issue here is whether the taxpayer abandoned his Virginia domicile when he took up residence in Nigeria. While the taxpayer was not present in Virginia during the period in question, this fact alone did not work a change in domicile.
"Mere absence from a fixed home, however long continued, cannot work the change. To constitute a new domicile, two things must concur - first, residence in the new locality; second, the intention to remain there. Until a new domicile is established, the old one remains; and whenever a change of domicile is alleged, the burden of proving it rests on the party alleging it." Lindsay v. Murphy, 76 Va. 428 (1882).
Inasmuch as the taxpayer obviously met the first test set forth by the Virginia Supreme Court in Lindsay, it therefore becomes necessary to determine the taxpayer's intent. "Intent must frequently be determined from the declarations and conduct of the person in light of the attending circumstances." State-Planters Bank v. Commonwealth, 174 Va. 289, 6 S.E.2d 629 (1940).
The United States Supreme Court opined in District of Columbia v. Murphy, 314 U.S. 441 (1941), that the permanence of a domicile in a previous location along with other declarations and circumstances, can be indicative of a person's intention to return to his former state of residence in the future. The court specifically noted:
All facts which go to show the relations retained to one's former place of abode are relevant in determining domicile. What bridges have been kept and what have been burned? Does he retain a place of abode there or is there a family home with which he retains identity? Does he have investments in local property or enterprise which attach him to the community? How permanent was his domicile in the community from which he came? Would a return to the old community pick up threads of close association?
Similarly, §58-151.02(e)(1)(iii) of the Code of Virginia (recodified as Virginia Code §58.1-302 effective January 1, 1985) set forth the factors to be used in determining one's domicile for Virginia income tax purposes:
The fact that a person has removed his abode to a place without this State is not conclusive evidence of a change of domicile. 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 registration, 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.
In this case, several factors indicate a continued Virginia domicile on the part of the taxpayer. Residence in Virginia was continuous from September 1946 to April 1979 when the taxpayer went to Nigeria, except for a tour of military duty and a stay in Nigeria from December 1977 to March 1979. After each such stay outside of Virginia, the taxpayer returned to his home within the state.
In addition, the taxpayer was not assigned overseas permanently, but for the set terms of either his visa (three years) or his employer's contract with the Nigerian government (five years). Lastly, the taxpayer maintained significant contacts with Virginia while in Nigeria. His family remained in Virginia during the period and he maintained motor vehicles and his home in the state. In addition, he maintained his right to vote in Virginia and his Virginia driver's license.
While the taxpayer made a statement of intent to remain in Nigeria as a precondition to obtaining a visa, this is not conclusive of an intention to abandon Virginia domicile as the statement was clearly inconsistent with the taxpayer's conduct and other attendant circumstances. Accordingly, I must conclude that the taxpayer did not effect a change in his domicile and is therefore subject to the individual income tax as a full-year resident for taxable year 1980. Therefore, the assessment issued to your client is to be deemed due and payable.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner