Did daily logs and receipts prove that a wife changed domicile in November 2005 and spent too few days in Virginia to be an actual resident in 2006?

Subject

Detailed day-count records proved a domicile change and nonresident status

Plain-English summary

Virginia abated the 2005 and 2006 assessments after the wife substantiated her move and travel. The married couple began 2005 domiciled in Virginia. In November, the wife moved to State A, took full-time employment, and established a residence there, while the husband and minor child remained in Virginia.

The audit originally questioned how many days the wife spent in each state. On appeal, she supplied a daily log and receipts covering part of 2006. Virginia found that the records made her reported day counts for late 2005 and 2006 reasonably accurate.

The Department accepted that she changed domicile in November 2005, so she was not a full-year Virginia resident that year. It also found that she did not spend more than 183 days in Virginia in 2006 and therefore was not an actual resident for that year.

What this means for you

• A new home and full-time employment can strongly support an out-of-state domicile change.
• Day-count disputes are easier to resolve with contemporaneous logs and receipts.
• Domiciliary residence and actual residence are separate tests.
• A spouse and child remaining in Virginia did not override the wife's documented facts here.

Common questions

When did the wife change domicile?

Virginia accepted November 2005 as the change date.

What proved her 2006 day count?

A daily log and receipts supported the reported number of days in Virginia and State A.

What happened to the assessments?

Virginia abated the assessments for both years at issue.

Citations and references

• Va. Code § 58.1-302.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 09-143

Original ruling text

September 29, 2009

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 "Taxpayers) for the taxable years ended December 31, 2005 and 2006.

FACTS

The Taxpayers, a husband and wife, were domiciliary residents of Virginia in the beginning of 2005. In November 2005, the wife became a domiciliary resident of * (State A). The Taxpayers' minor child continued to live in Virginia with the husband.

The Taxpayers were audited for the 2005 and 2006 taxable years. The Department's auditor questioned the number of days the wife spent in Virginia. When the wife could not provide sufficient documentation to show the number of days she spent in Virginia and in State A, the auditor issued assessments for the taxable years at issue. The Taxpayers contest the auditor's findings, asserting that the wife changed her domicile to State A in 2005, and she was snot an actual resident of Virginia in 2006.

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 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. 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 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.

Based on the information provided, there is no question that the wife changed her domicile to State A in November 2005. The wife was employed full-time in State A after moving from Virginia and established a residence in State A. In addition, the wife was able to provide detailed documentation, including a daily log and a number of receipts for a portion of the 2006 taxable year. This evidence indicates that the number of days in Virginia reported to the auditor for the latter portion of 2005 and 2006 were reasonably accurate. As such, I must conclude that the wife was not a full year resident of Virginia for the 2005 taxable year, nor was she an actual resident for the 2006 taxable year. Accordingly, the assessments issued for the taxable years at issue will be abated.

The Code of Virginia sections and public document cited are available online 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 * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Janie E. Bowen

Tax Commissioner

AR/1-2994753773.B