Tax Type
Individual Income Tax
Description
Residency
Topic
Taxpayers
Date Issued
10-14-1999
October 14, 1999
Re: Sec. 58.1-1821 Application: Individual Income Tax
Dear***
This will reply to your letter concerning the 1993 and 1994 Virginia individual income tax assessments for your client, ***** (the ``Taxpayer'). I apologize for the delay in responding to your letter.
FACTS
The Taxpayer was a resident of State A until 1991. In 1991, the Taxpayer and his family sold their house in State A and moved to a foreign country for employment purposes. In 1992, the Taxpayer's wife became pregnant and returned to State A with the children to live with the Taxpayer's parents. Later in 1992, the Taxpayer's parents, wife, and children moved to Virginia. The Taxpayer then bought some undeveloped property in Virginia as a site of a future vacation home. While the Taxpayer was visiting the family in Virginia, he obtained a Virginia driver's license as his State A license was close to expiring. The Taxpayer's wife and children moved back to State A for a brief period in 1992.
In 1993, the Taxpayer's wife and children rejoined the Taxpayer in the foreign country. However, the Taxpayer and family moved to State B in June 1993 for employment purposes. His wife and children spent the summer of 1993 at a rented vacation house in Virginia. The Taxpayer made frequent visits to Virginia, but continued to work in State B. His wife and children returned to State B at the end of the summer where they lived with the Taxpayer in a leased house. Around this same time, the Taxpayer began building a home on the Virginia property purchased in 1992. In 1994, the home was completed. The wife and children moved into the new home in Virginia. The Taxpayer remained in State B in 1994 living in the leased house and an apartment later in the year. The total amount of time the Taxpayer spent in Virginia in was about four weeks in 1993 and 10 weeks in 1994.
During the 1993 and 1994 taxable years, the Taxpayer was not registered to vote in any state. The Taxpayer did not do any banking in Virginia. The Taxpayer also did not earn any Virginia source income during 1993 and 1994. Under audit, the Taxpayer was assessed individual income taxes for the taxable years of 1993 and 1994. The Taxpayer contends that he was not a domiciliary or actual resident of Virginia for the 1993 and 1994 taxable years.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia Sec. 58.1-302. Domiciliary residence means the permanent place of residence of a taxpayer and/or the place to which he or she intends to return even though they may actually reside elsewhere. For an individual to change domiciliary residency to another state, that individual must intend to abandon their Virginia domicile with no intention of returning to Virginia. Concurrently, that individual 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 an individual who for an aggregate of more than 183 days of the taxable year, maintained a 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, an individual 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 as a resident.
In determining domicile, consideration may be given to an 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 an individual's domicile. An individual'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 department concedes that it is difficult to know whether an individual intends to return to Virginia The individual has the burden of proving abandonment of his or her Virginia domicile. If the information is inadequate to meet this burden, the department will conclude that he or she intended to return to Virginia.
Based on the information provided, the Taxpayer was neither an actual nor domiciliary resident of Virginia. The Taxpayer spent less than 183 days in Virginia in each year and had very few connections to Virginia. While the Taxpayer did hold a Virginia driver's license, it appears that the Taxpayer was not eligible to hold a Virginia driver's license in 1992. Based on the facts provided, the Taxpayer's domicile was in a state other than Virginia.
Accordingly, the assessments for the taxable years of 1993 and 1994 have been abated. If you have any questions, you may contact ***** in the Office of Tax Policy at *****
Sincerely,
Danny M. Payne
Tax Commissioner
Re: Sec. 58.1-1821 Application: Individual Income Tax
Dear***
This will reply to your letter concerning the 1993 and 1994 Virginia individual income tax assessments for your client, ***** (the ``Taxpayer'). I apologize for the delay in responding to your letter.
FACTS
The Taxpayer was a resident of State A until 1991. In 1991, the Taxpayer and his family sold their house in State A and moved to a foreign country for employment purposes. In 1992, the Taxpayer's wife became pregnant and returned to State A with the children to live with the Taxpayer's parents. Later in 1992, the Taxpayer's parents, wife, and children moved to Virginia. The Taxpayer then bought some undeveloped property in Virginia as a site of a future vacation home. While the Taxpayer was visiting the family in Virginia, he obtained a Virginia driver's license as his State A license was close to expiring. The Taxpayer's wife and children moved back to State A for a brief period in 1992.
In 1993, the Taxpayer's wife and children rejoined the Taxpayer in the foreign country. However, the Taxpayer and family moved to State B in June 1993 for employment purposes. His wife and children spent the summer of 1993 at a rented vacation house in Virginia. The Taxpayer made frequent visits to Virginia, but continued to work in State B. His wife and children returned to State B at the end of the summer where they lived with the Taxpayer in a leased house. Around this same time, the Taxpayer began building a home on the Virginia property purchased in 1992. In 1994, the home was completed. The wife and children moved into the new home in Virginia. The Taxpayer remained in State B in 1994 living in the leased house and an apartment later in the year. The total amount of time the Taxpayer spent in Virginia in was about four weeks in 1993 and 10 weeks in 1994.
During the 1993 and 1994 taxable years, the Taxpayer was not registered to vote in any state. The Taxpayer did not do any banking in Virginia. The Taxpayer also did not earn any Virginia source income during 1993 and 1994. Under audit, the Taxpayer was assessed individual income taxes for the taxable years of 1993 and 1994. The Taxpayer contends that he was not a domiciliary or actual resident of Virginia for the 1993 and 1994 taxable years.
DETERMINATION
Two classes of residents, a domiciliary resident and an actual resident, are set forth in Code of Virginia Sec. 58.1-302. Domiciliary residence means the permanent place of residence of a taxpayer and/or the place to which he or she intends to return even though they may actually reside elsewhere. For an individual to change domiciliary residency to another state, that individual must intend to abandon their Virginia domicile with no intention of returning to Virginia. Concurrently, that individual 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 an individual who for an aggregate of more than 183 days of the taxable year, maintained a 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, an individual 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 as a resident.
In determining domicile, consideration may be given to an 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 an individual's domicile. An individual'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 department concedes that it is difficult to know whether an individual intends to return to Virginia The individual has the burden of proving abandonment of his or her Virginia domicile. If the information is inadequate to meet this burden, the department will conclude that he or she intended to return to Virginia.
Based on the information provided, the Taxpayer was neither an actual nor domiciliary resident of Virginia. The Taxpayer spent less than 183 days in Virginia in each year and had very few connections to Virginia. While the Taxpayer did hold a Virginia driver's license, it appears that the Taxpayer was not eligible to hold a Virginia driver's license in 1992. Based on the facts provided, the Taxpayer's domicile was in a state other than Virginia.
Accordingly, the assessments for the taxable years of 1993 and 1994 have been abated. If you have any questions, you may contact ***** in the Office of Tax Policy at *****
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner