Tax Type
Individual Income Tax
Description
Residency; Military personnel and spouses.
Topic
Taxpayers' Remedies
Date Issued
10-08-1997
October 8, 1997
Re: Request for Ruling: Individual Income Tax
Dear**************
This will reply to your letter of June 30, 1997 in which you request a ruling on your residency status. I apologize for the delay in responding to your letter.
FACTS
You enlisted in the United States Army in June, 1978 and served until December, 1991. You left the military in Germany and have been living there ever since. You have no property in Virginia, have never registered to vote, and plan on residing in Germany permanently. You request a ruling on your residency status and information on how to get a refund for taxes that have been paid.
RULING
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302, copy enclosed. The domiciliary residence of a person means that the permanent place of residence of a taxpayer is Virginia and the place to which he intends to return is Virginia even though he may actually reside elsewhere. For a person to change domiciliary residency to another state or country, that person must intend to abandon his Virginia domicile with no intention of returning to Virginia. Concurrently, that person must acquire a new domicile where that person is physically present with the intention to remain there permanently or indefinitely. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained his place of abode within Virginia. A Virginia domiciliary resident, therefore, working in other parts of the country who has not abandoned his Virginia residency continues to be subject to Virginia taxation.
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.
The Soldiers' and Sailors' (Civil Relief Act of 1940 (50 USCA § 574) provides that military and naval personnel do not abandon their legal domicile solely by complying with military orders which station them in a different state or country. The Act, however, does not preclude the possibility that military personnel may acquire a new legal domicile in the state where they are stationed, and thus subject themselves to taxation by that state as if they were a domiciliary resident. In order for the change of domicile to occur, there must be an abandonment of the old domicile and the acquisition of a new one. This change must be exhibited by an individual's intent and conduct. Military personnel stationed in Virginia are not automatically subject to Virginia taxation if they reside in the Commonwealth for more than 183 days. They may become Virginia domiciliary residents if they intend to remain in Virginia permanently or indefinitely.
Code of Virginia § 58.1-341, copy enclosed, provides that every resident individual and every nonresident individual who has Virginia taxable income (i.e. income from Virginia sources) must file a Virginia income tax return. If you were required to file a Virginia income tax return during the years in question, and you did not, Code of Virginia § 58.1-347, copy enclosed, provides that a penalty will be assessed on any tax due to the Commonwealth at a rate of six percent per month beyond the filing deadline up to an aggregate of thirty percent of the tax. If you were required to file individual income tax returns, but did not file them, and the amount of money withheld exceeds the amount of tax due, no penalty will be assessed.
Code of Virginia § 58.1-1823, copy enclosed, provides the procedure for filing an amended return for requesting a refund. Virginia law allows an amended return to be filed within the later of: (1) three years from the last day prescribed by law for the timely filing of the return; (2) ninety days form the final determination of any change or correction in the liability of the taxpayer for any federal tax upon which the state tax is based, provided that the refund does not exceed the amount of the decrease in Virginia tax attributable to such federal change or correction; (3) two years from the filing of an amended Virginia return resulting in the payment of additional tax, provided that the amended return raises issues relating solely to such prior amended return and that the refund does not exceed the amount of the payment with such prior amended return; or (4) two years from the payment of an assessment, provided that the amended return raises issues relating solely to such assessment and that the refund does not exceed the amount of such payment. If you have paid taxes to the Commonwealth and you were a nonresident who was not subject to taxation in the Commonwealth, then you may file an amended return asking for a refund if your fit within one of the enumerated limitation period above. The statute provides taxpayers with a reasonable amount of time to request refunds of overpaid taxes. It is also instructive to note that in all but exceptional cases, i.e, tax fraud or failure to file a return, the same three year period of limitations applies to the department for the assessment of additional taxes.
I hope that this ruling answers your request. If you have any questions, you may contact ******at *********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12769B
Rulings of the Tax Commissioner