Tax Type
Individual Income Tax
Description
Residency
Topic
Taxpayers
Date Issued
06-07-1999
June 7, 1999
Re: § 58.1-1821 Application: Individual Income Taxation
Dear*******************
This will reply to your letter in which you contest the assessment of tax, penalty and interest against ****************** (the "Taxpayer') for the 1992 through 1996 taxable years. I apologize for the delay in responding.
FACTS
The Taxpayer was a member of the military during the taxable years in question. He did not rent nor own a residence in the Commonwealth during the years in question. He was stationed in Virginia from 1993 through 1995. He was issued a Virginia driver's license in 1993 which expired in March 1998. However, his car was registered in another state during those years. Because the Taxpayer traveled extensively as a result of his military assignment, mail and information returns were sent to his sister's Virginia residence. She would forward the mail to wherever he was then located.
The Taxpayer was assessed tax, penalty and interest for the 1992 through 1996 taxable years as a resident nonfiler. The Taxpayer contests the assessment on the basis that he was not a Virginia domiciliary resident.
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 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.
The evidence demonstrates that the Taxpayer was not a Virginia domiciliary resident prior to the years at issue. Therefore, in order for the Taxpayer to become a Virginia domiciliary resident, he would need to simultaneously abandon an established domicile and establish a new domicile in Virginia. The establishment of a new domicile requires that the individual have the intent to remain in the new domicile permanently or indefinitely. Apparently, the Taxpayer only resided in Virginia while he was stationed in Virginia, most likely at his sister's residence. Throughout all the years at issue he had his mail sent to his sister's house. From 1993 through 1998, he maintained a Virginia driver's license. However, the Taxpayer has since clearly established a domiciliary residence in another state.
The evidence is not substantial enough to establish that the Taxpayer moved to Virginia with the intent to remain permanently or indefinitely. On the contrary, the Taxpayer never purchased or leased a residence, nor performed any act, with the exception of retaining a Virginia driver's license, which demonstrated an intent to remain in Virginia. In addition, there is no evidence that would demonstrate the Taxpayer abandoned domicile in the other state.
Accordingly, the assessments of income tax, penalty and interest have been abated. If you have any questions about this determination, you may contact **************** at ******************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/13844B
Rulings of the Tax Commissioner