Tax Type
Individual Income Tax
Description
Residency
Topic
Taxpayers
Date Issued
07-23-1999
July 23, 1999
Re: Sec. 58.1-1821 Application: Individual Income Taxation
Dear***
This will reply to your letter in which you contest the assessment of tax and interest against ***** (the "Taxpayers') for the 1996 taxable year.
FACTS
The Taxpayers, Virginia residents, moved to a leased residence in another state ("State A') at the beginning of 1996. Upon moving to State A, the Taxpayers obtained State A driver's licences and registration, registered to vote, recorded a declaration of domicile, and established bank accounts.
In February 1996, the Taxpayers contracted to build a home in State A which they moved into in September 1996. During 1996, the Taxpayers returned to Virginia for extended periods of time to complete the sale of their Virginia home and to administer a deceased parent's estate.
The department determined that the Taxpayers were Virginia residents through September of 1996 and assessed the Taxpayers as part year residents. The Taxpayers contend that Virginia domicile was abandoned as of the beginning of January, 1996.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia Sec. 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 in the instant case indicates that the Taxpayers intended to change their domicile in the beginning of 1996. The Taxpayers performed numerous acts consistent with initiating a new domicile including: 1) establishing a residence in State A by renting a home; 2) obtaining State A driver's licenses and registrations; 3) registering to vote in State A; 4) declaring domicile in State A; and 5) transferring bank accounts to State A. In addition, the Taxpayers showed intent to abandon their Virginia domicile by 1) selling their Virginia residence; 2) closing Virginia bank accounts; and 3) discontinuing Virginia driver's licenses and automobile registrations. Based on the facts presented, the Taxpayers successfully abandoned their Virginia domicile and established domicile in State A at the beginning of 1996.
Accordingly, the 1996 income tax assessment has been abated in full. If you have any questions about this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/22638B
Re: Sec. 58.1-1821 Application: Individual Income Taxation
Dear***
This will reply to your letter in which you contest the assessment of tax and interest against ***** (the "Taxpayers') for the 1996 taxable year.
FACTS
The Taxpayers, Virginia residents, moved to a leased residence in another state ("State A') at the beginning of 1996. Upon moving to State A, the Taxpayers obtained State A driver's licences and registration, registered to vote, recorded a declaration of domicile, and established bank accounts.
In February 1996, the Taxpayers contracted to build a home in State A which they moved into in September 1996. During 1996, the Taxpayers returned to Virginia for extended periods of time to complete the sale of their Virginia home and to administer a deceased parent's estate.
The department determined that the Taxpayers were Virginia residents through September of 1996 and assessed the Taxpayers as part year residents. The Taxpayers contend that Virginia domicile was abandoned as of the beginning of January, 1996.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia Sec. 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 in the instant case indicates that the Taxpayers intended to change their domicile in the beginning of 1996. The Taxpayers performed numerous acts consistent with initiating a new domicile including: 1) establishing a residence in State A by renting a home; 2) obtaining State A driver's licenses and registrations; 3) registering to vote in State A; 4) declaring domicile in State A; and 5) transferring bank accounts to State A. In addition, the Taxpayers showed intent to abandon their Virginia domicile by 1) selling their Virginia residence; 2) closing Virginia bank accounts; and 3) discontinuing Virginia driver's licenses and automobile registrations. Based on the facts presented, the Taxpayers successfully abandoned their Virginia domicile and established domicile in State A at the beginning of 1996.
Accordingly, the 1996 income tax assessment has been abated in full. If you have any questions about this determination, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/22638B
Rulings of the Tax Commissioner