Tax Type
Individual Income Tax
Description
Residency
Topic
Taxpayers
Date Issued
05-14-1999
May 14, 1999
Re: § 58.1-1821 Application: Individual Income Tax
Dear***
This will reply to your letter in which you are contesting an assessment of individual income tax on behalf of your clients, ***** (the "Taxpayers') for the 1993 taxable year. I apologize for the delay in responding.
FACTS
The Taxpayers filed a Virginia nonresident return for the 1993 taxable year and no return for the 1994 taxable year. Based on information provided by the Taxpayers, the department determined that the Taxpayers were domiciliary residents of Virginia. The Taxpayers were assessed for additional tax and interest for 1993 and tax, penalty and interest for 1994.
The Taxpayers resided exclusively in Virginia prior to 1991. In 1991, they purchased a home in State A. They reside in State A from January through June and from September through November. The Taxpayers have registered vehicles in State A and have State A drivers licenses. The Taxpayers own the same Virginia home which they lived at prior to 1991. They have never rented this house although their son lived there from 1991 through 1997. The Taxpayers have indicated that they recently put this house on the market. They have maintained Virginia checking and savings accounts. The Taxpayers filed their 1993 federal income tax returns in Virginia and their third party information returns (1099's) were sent to their Virginia residence. The husband maintains a Virginia driver's license and has a vehicle and boat trailer registered in Virginia.
DETERMINATION
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 and the place to which he intends to return even though he may actually reside elsewhere. For a person to change domiciliary residency to another state, 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.
In determining domicile, consideration may be given to the individual's expressed intent, conduct, and all attendant circumstances including, but not limited to, financial independence, profession or employment, income sources, residence of spouse, marital status, sites of real and tangible property, motor vehicle registration and licensing, and such other factors as may be reasonably deemed necessary to determine the person's domicile. A person's true intention must be determined with reference to all of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.
The Taxpayers have performed the following actions which are consistent with a change in domicile: 1) they purchased a home in State A; 2) obtained State A drivers licenses and registered automobiles in State A; 3) registered to vote in State A; and 4) reside in State A for nine months of the year. The Taxpayers have also performed the following activities, or failed to perform the following activities, which demonstrate that they have not changed their domicile: 1) they maintain a home in Virginia which has never been sold or rented; 2) federal tax information was mailed to and from their Virginia house; 3) they maintain checking and savings accounts in Virginia; and 4) the husband Taxpayer maintains a drivers license and vehicle and boat registrations in Virginia.
The department concedes that it is difficult to know whether a taxpayer intends to return to Virginia. The department determines a taxpayer's intent through the information provided. The Taxpayer has the burden of proving that he or she has abandoned his or her Virginia domicile. If the information is inadequate to meet his or her burden, the Commissioner must conclude that he or she intended to return to Virginia.
Based on the evidence, the Taxpayers have met the burden of proving that they established domicile in State A with the intention to remain there permanently or indefinitely. Even though the Taxpayers did not perform all of the normal actions associated with abandoning Virginia domicile, their actions in State A are consistent with a change in domicile.
Accordingly, the assessments for the 1993 and 1994 tax years have been abated. If you have any questions about this determination, you may contact ********* at ********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12822B
Rulings of the Tax Commissioner