Did a merchant mariner who separated from his spouse and established ties to a U.S. territory remain a Virginia domiciliary resident?

Subject

Merchant mariner abandoned Virginia domicile

Plain-English summary

Virginia concluded that the taxpayer had abandoned his Virginia domicile and established a domicile outside Virginia, so it abated his 2003 and 2004 assessments.

The taxpayer was a merchant mariner based in a U.S. territory, worked as a civilian employee for a branch of the U.S. military, and spent more than 200 days each year at sea. After separating from his wife in November 2002, he was barred by the separation agreement from living in their Virginia home. He surrendered his Virginia driver's license, first obtained a license in another state, then obtained a territory driver's license and registered to vote in the territory in 2003.

Some facts still pointed toward Virginia. He owned vehicles registered in Virginia and garaged at his wife's residence, bought another vehicle in 2004, received tax information at the Virginia address, and later filed a joint federal and part-year Virginia return with his wife. The Commissioner also noted that he did not properly file a part-year return under the other state's law.

On balance, however, he maintained no permanent Virginia abode, spent very little time in Virginia, worked outside Virginia, and established licensing and voting connections elsewhere. Those combined facts were enough to show both abandonment of the old domicile and establishment of a new one.

What this means for you

• Virginia domicile does not automatically continue merely because a spouse, home, vehicles, or mail remain in Virginia.
• A person changing domicile must both abandon Virginia with no intent to return and acquire a new place where the person intends to remain permanently or indefinitely.
• Work outside Virginia, even for more than 183 days, does not by itself end Virginia domicile.
• The Department weighs the full pattern of conduct, including housing, marriage, licenses, voter registration, property, work, and tax filings.
• Conflicting facts do not necessarily defeat a domicile change, but they make contemporaneous evidence especially important.

Common questions

Why did Virginia abate the assessments?

The Commissioner found the taxpayer had no permanent Virginia abode, spent little time in Virginia, worked elsewhere, and established driver's-license and voter-registration ties outside Virginia after his separation.

Did the Virginia-registered vehicles keep him domiciled in Virginia?

No. They counted against him, but the Commissioner weighed them with all the other circumstances rather than treating them as conclusive.

Is being away for more than 183 days enough to change domicile?

No. The ruling says a person may remain a Virginia domiciliary even while working elsewhere or aboard a vessel for more than 183 days. Intent and the acquisition of a new domicile are also required.

What happened to the 2003 and 2004 tax bills?

They were abated.

Citations and references

• Va. Code § 58.1-1821.
• Va. Code § 58.1-302.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 07-199

Original ruling text

November 30, 2007

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek correction of the individual income tax assessments issued to * (the "Taxpayer") for the taxable years ended December 31, 2003 and 2004.

FACTS

The Taxpayer is a merchant marine based in * ("Territory A"), a United States territory. He works as a civilian employee for a branch of the United States Military and spends more than 200 days per year at sea.

In 2002, the Taxpayer, his wife, and children resided in a Virginia residence on a full-time basis. In November 2002, the Taxpayer and his wife separated. Pursuant to the separation agreement, the wife and children remained at the Virginia residence. At the time of the separation, the Taxpayer relinquished his Virginia driver's license and acquired a * ("State A") driver's license. The Taxpayer acquired a Territory A driver's license in December 2003 and registered to vote in Territory A in 2003.

The Taxpayer owned several vehicles that are registered in Virginia and garaged at the wife's residence. One of the vehicles was purchased in November 2004. The Taxpayer's tax information returns were sent to the Virginia address. The Taxpayer filed Virginia nonresident individual income tax returns for the years at issue that used State A address. In 2005, the Taxpayer filed a joint federal return with his wife using the Virginia residence address and a joint part-year Virginia income tax return.

The Taxpayer was audited and assessments of tax and interest were assessed for the 2003 and 2004 taxable years on the basis that he failed to change his Virginia domicile. The Taxpayer contests the assessment and contends that he successfully changed his domicile to Territory A.

DETERMINATION

Two classes of residents, a domiciliary resident and an actual resident, are set forth in Va. Code § 58.1-302. The domiciliary residence of a person means the permanent place of residence of an individual or the place to which he intends to return even though he may actually reside elsewhere. For an individual to change his domiciliary residency to another state, that individual must intend to abandon his Virginia domicile with no intention of returning to Virginia. Concurrently, that individual must acquire a new domicile, where that individual 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, maintains a place of abode within Virginia, whether domiciled in Virginia or not.

An individual may become a Virginia domiciliary resident, even if he works in other parts of the country, in another country, or, as in the husband's case, is employed on board a vessel more than 183 days in a taxable year.

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 domiciliary residency.

The Taxpayer performed several actions supporting a change in domicile from Virginia. The Taxpayer relinquished his Virginia driver's license and obtained a State A driver's license in November 2002. The Taxpayer further acquired a Territory A driver's license and registered to vote in Territory A in September 2003. In addition, the Taxpayer has provided a separation agreement prohibiting him from living in the joint marital home in Virginia.

The Taxpayer also performed actions that are consistent with maintaining a Virginia domicile. The Taxpayer continued to own and register motor vehicles that were garaged at the wife's residence, including one purchased in 2004. In addition, he failed to properly file a part-year income tax return in accordance with State A law.

The evidence shows that the Taxpayer maintained no permanent place of abode in Virginia, spent very little time in Virginia, established residency connections outside Virginia in the form of driver's licenses and voter registrations, and was employed outside Virginia. Based on a review of the facts and circumstances in this case, I find that there is sufficient evidence to demonstrate that the Taxpayer abandoned his Virginia domicile and established a domicile without Virginia. Accordingly, the assessments of tax issued to the Taxpayer for the 2003 and 2004 taxable years have been abated.

The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions regarding this determination, you may contact * at ***.

Sincerely,

Janie E. Bowen

Tax Commissioner

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