Tax Type
Individual Income Tax
Description
The Taxpayer contends that Virginia domicile was abandoned
Topic
Domicile
Taxpayers
Date Issued
06-22-1999
June 22, 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 1993 taxable year. I apologize for the delay in responding.
FACTS
The Taxpayer, a Virginia resident, was transferred by his employer to another state ("State A') at the beginning of 1993. The Taxpayer was on vacation outside the United States for the first two weeks of January. After returning from vacation, the Taxpayer started to work in State A. Due to the nature of the new position, the Taxpayer traveled extensively through the southeast United States and stayed in hotels. The Taxpayer's spouse remained in Virginia in order to wind up their affairs and sell the Virginia residence.
In February 1993, the Taxpayer and spouse purchased land in the State A and began construction on a home. In April of 1993, the Taxpayer and spouse leased a home in State A to live in until the new home was built. In May 1993, the Virginia residence was sold. Driver's licenses and registrations were obtained in State A in April 1993. Dividends, interest and third party tax returns were sent to a company in Virginia which handles personal expenses. The Taxpayer registered to vote in State A in October 1994. Prior to leasing the residence, the Taxpayer returned to Virginia several times to help the spouse sell the Virginia home.
The department determined that the Taxpayer was a Virginia resident through the middle of April 1993 and assessed the Taxpayer as a part year resident. The Taxpayer contends that Virginia domicile was abandoned as of the beginning of January, 1993.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. 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 Virginia, that person must intend to abandon his old domicile with no intention of returning to that same domicile. 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 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.
Changing domicile is a two step process. First, a person must intend to permanently move away from one domicile. Second, the person must acquire a new domicile where they intend to remain permanently or indefinitely. The evidence provided establishes the Taxpayer's intent to change domicile. The Taxpayer's employer has provided affidavits attesting that the transfer was effective in the beginning of January in State A. The Taxpayer only periodically visited the Virginia home for the purpose of closing out his Virginia affairs and subsequently leased a home in State A. The Taxpayer obtained a State A driver's license and registered to vote in State A.
The question is when the change actually occurred. The Taxpayer's employment status changed as of the beginning of the year. However, the Taxpayer did not begin the new job until the vacation was complete. Also, a permanent residence is State A was not established until April 1993.
Although the Taxpayer was scheduled to start the new position at the first of the year, actual work did not begin until after the vacation. As such, the earliest that change could have occurred was in mid-January. Also, while the Taxpayer did not establish a permanent residence until April 1993, a number of activities consistent with the intent to abandon the Virginia domicile were completed much earlier.
Accordingly, the department has concluded that the change of domicile occurred in early January 1993, after the vacation was completed. Enclosed is a schedule which shows the amount of tax, penalty and interest due. Please send the amount assessed to *****, Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23218 within 30 days to prevent the accrual of additional interest. If you have any questions about this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/113773B
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 1993 taxable year. I apologize for the delay in responding.
FACTS
The Taxpayer, a Virginia resident, was transferred by his employer to another state ("State A') at the beginning of 1993. The Taxpayer was on vacation outside the United States for the first two weeks of January. After returning from vacation, the Taxpayer started to work in State A. Due to the nature of the new position, the Taxpayer traveled extensively through the southeast United States and stayed in hotels. The Taxpayer's spouse remained in Virginia in order to wind up their affairs and sell the Virginia residence.
In February 1993, the Taxpayer and spouse purchased land in the State A and began construction on a home. In April of 1993, the Taxpayer and spouse leased a home in State A to live in until the new home was built. In May 1993, the Virginia residence was sold. Driver's licenses and registrations were obtained in State A in April 1993. Dividends, interest and third party tax returns were sent to a company in Virginia which handles personal expenses. The Taxpayer registered to vote in State A in October 1994. Prior to leasing the residence, the Taxpayer returned to Virginia several times to help the spouse sell the Virginia home.
The department determined that the Taxpayer was a Virginia resident through the middle of April 1993 and assessed the Taxpayer as a part year resident. The Taxpayer contends that Virginia domicile was abandoned as of the beginning of January, 1993.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia § 58.1-302. 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 Virginia, that person must intend to abandon his old domicile with no intention of returning to that same domicile. 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 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.
Changing domicile is a two step process. First, a person must intend to permanently move away from one domicile. Second, the person must acquire a new domicile where they intend to remain permanently or indefinitely. The evidence provided establishes the Taxpayer's intent to change domicile. The Taxpayer's employer has provided affidavits attesting that the transfer was effective in the beginning of January in State A. The Taxpayer only periodically visited the Virginia home for the purpose of closing out his Virginia affairs and subsequently leased a home in State A. The Taxpayer obtained a State A driver's license and registered to vote in State A.
The question is when the change actually occurred. The Taxpayer's employment status changed as of the beginning of the year. However, the Taxpayer did not begin the new job until the vacation was complete. Also, a permanent residence is State A was not established until April 1993.
Although the Taxpayer was scheduled to start the new position at the first of the year, actual work did not begin until after the vacation. As such, the earliest that change could have occurred was in mid-January. Also, while the Taxpayer did not establish a permanent residence until April 1993, a number of activities consistent with the intent to abandon the Virginia domicile were completed much earlier.
Accordingly, the department has concluded that the change of domicile occurred in early January 1993, after the vacation was completed. Enclosed is a schedule which shows the amount of tax, penalty and interest due. Please send the amount assessed to *****, Office of Tax Policy, Virginia Department of Taxation, P.O. Box 1880, Richmond, Virginia 23218 within 30 days to prevent the accrual of additional interest. If you have any questions about this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/113773B
Rulings of the Tax Commissioner