Was a person domiciled in another state still a Virginia resident after living and working in Virginia for 190 days?

Plain-English summary

Virginia treated the taxpayer as a resident because he lived and worked in the Commonwealth for 190 days during 2007. He remained domiciled in another state, but domicile was not the only route to Virginia resident status.

Va. Code § 58.1-302 recognizes both domiciliary residents and actual residents. An actual resident is a person who maintains a place of abode in Virginia for an aggregate of more than 183 days during the taxable year. The taxpayer crossed that threshold, so Virginia could tax him as a resident even though he had not established Virginia domicile.

The Department upheld the assessment, which had been estimated from available information after the taxpayer did not respond to an inquiry. It gave him 30 days to file a proper 2007 Virginia return that could more accurately calculate the liability; otherwise collection would resume on the assessment as issued.

What this means for you

• Domicile and actual residency are separate Virginia income-tax tests.
• Maintaining a Virginia abode for more than 183 days can create resident status without Virginia domicile.
• Keep reliable records of days spent in Virginia and where you maintained an abode.
• If Virginia estimates an assessment, filing the missing return may produce a more accurate liability.

Citations and references

• Va. Code § 58.1-302.
• P.D. 00-167 (Sept. 8, 2000).

Subject

Taxpayer can be an actual resident of Virginia without establishing domicile

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 11-109

Original ruling text

June 14, 2011

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek correction of the Virginia individual income tax assessment issued to * (the "Taxpayer") for the 2007 taxable year. I apologize for the delay in the Department's response.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that third-party financial documents for the 2007 taxable year were sent to the Taxpayer at a Virginia address. The Department requested information to verify whether the Taxpayer was subject to Virginia income tax. When the Taxpayer failed to respond, an assessment was issued based on the available information. The Taxpayer appeals the assessment, contending he was domiciled in * ("State A") during the 2007.

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 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 another state, that person must intend to abandon his Virginia domicile with no intention of returning to Virginia. 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, therefore, 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.

The evidence indicates that the Taxpayer maintained his domiciliary residence in State A during 2007. However, the Taxpayer also lived and worked in Virginia for 190 days in 2007.

A taxpayer can be an actual resident of Virginia without establishing domicile in the Commonwealth. See Public Document (P.D.) 00-167 (9/8/2000). As such, even though the Taxpayer is a domiciliary resident of State A, he is subject to Virginia income tax as a resident because he spent more than 183 days in Virginia during the taxable year at issue.

Accordingly, the Virginia individual income tax assessment for the 2007 taxable year is upheld. The assessment, however, was made based on the information available to the Department. The Taxpayer may have additional information that more accurately reflects his Virginia taxable income. It may, therefore, be advisable for the Taxpayer to file a 2007 Virginia individual income tax return in order to more accurately reflect his tax liability.

Collection action on the 2007 assessment will be held in abeyance for 30 days to allow the Taxpayer to file a proper 2007 individual income tax return. Please send the return to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23218-7203, Attention: *. If such return is not filed within the allotted time, the assessment will be correct as issued and collection action will resume on the outstanding balance.

The Code of Virginia sections and public document 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 response, you may contact * at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1-4606195317.E