I moved out of Virginia and set up a home, license, and voter registration in another state, but I never gave up my Virginia driver's license or voter registration -- have I actually changed my domicile for tax purposes?

Plain-English summary

The Department received information from the IRS suggesting a husband and wife may have owed Virginia income tax for 2015. When the couple filed a Virginia nonresident return for that year, the Department instead treated them as Virginia RESIDENTS and assessed tax for 2015 through 2018. The couple appealed, arguing the husband had become a resident of a different state ("State A") and was no longer a Virginia domiciliary.

The wife's Virginia residency wasn't in dispute. She kept a Virginia address and a Virginia driver's license, and the taxpayers didn't contest her Virginia domiciliary status on appeal.

The husband had real State A ties -- but that's only half the test. He showed he owned residential property in State A, held a State A driver's license, registered vehicles there, registered to vote there, and filed State A resident income tax and business franchise tax returns. Changing domicile, however, requires TWO things to exist at the same time: (1) actually abandoning the old domicile with no intent to return, and (2) acquiring a new domicile through physical presence plus an intent to stay permanently or indefinitely. The husband's evidence went to the second element, but he still owned a Virginia home, held an unrelinquished Virginia driver's license (issued 2012, not given up until 2020), had Virginia-registered vehicles, stayed registered to vote in Virginia, and kept receiving tax information returns at his Virginia address -- none of which showed he had abandoned Virginia.

The kept driver's license and voter registration each cut against him, but not equally. Keeping a Virginia driver's license is a "strong indicator" of continued Virginia domiciliary intent, though not automatically disqualifying on its own. His explanation -- that he needed the Virginia license to drive a taxi -- didn't hold up, because Virginia law lets someone validly licensed in another state drive in Virginia, and the Department found no requirement that an already-licensed driver get a separate Virginia license to drive a taxi. Voter registration carries even more weight: under longstanding Virginia case law, obtaining a Virginia voter registration and actually voting is "very strong evidence" of Virginia domicile. The husband disclosed that he was registered to vote in both states but never disclosed whether he had actually voted, despite the Department asking repeatedly -- and Virginia law bars a court from granting relief from an erroneous assessment where the taxpayer willfully withheld required information.

Bottom line. Even assuming the husband's State A connections were enough to show an intent to establish a new domicile there, his extensive, unrelinquished Virginia connections meant he never showed he had abandoned his Virginia domicile. Since both elements must be present concurrently, the Department upheld the 2015-2018 assessments, while inviting the couple to file Virginia resident returns within 60 days so their actual liability could be more accurately computed.

What this means for you

For people claiming they moved their domicile out of Virginia

Building a genuine new-state life -- home, license, vehicle registration, voter registration, state tax filings -- proves you intended to establish a new domicile, but it does not by itself prove you abandoned your Virginia domicile. You need evidence of both halves of the test, and you carry the burden of proving the change.

For anyone who kept a Virginia driver's license or voter registration after relocating

A Virginia driver's license doesn't automatically defeat a domicile change, but it's treated as strong evidence you meant to keep Virginia as your domicile -- and an active Virginia voter registration that you actually used to vote is treated as even stronger evidence. If you've relocated for good, relinquishing your Virginia license, canceling your Virginia voter registration, and re-titling vehicles out of Virginia all help show genuine abandonment.

For anyone asked by the Department to provide voting history or similar records

Refusing or failing to answer the Department's requests for information can be used against you, and Virginia law can bar a court from granting relief from an assessment that resulted from a taxpayer's willful failure to provide required information.

Common questions

Q: Does keeping my Virginia driver's license automatically mean I'm still a Virginia domiciliary?
A: Not automatically -- the Department has recognized that someone can establish domicile elsewhere while still holding a Virginia license. But keeping (or renewing) a Virginia license is treated as a strong indicator that you still intend Virginia to be your domicile, and it works against you if you can't offer a good reason for keeping it.

Q: What's the strongest evidence of abandoning Virginia domicile?
A: Under this ruling, actually canceling ties -- not just acquiring new ones elsewhere -- matters most. Continuing to hold a Virginia voter registration, and especially actually voting in Virginia elections, is treated as very strong evidence you still considered Virginia your domicile; giving that up (along with your license, vehicle registration, and Virginia property) supports a genuine abandonment claim.

Q: I have a new home, license, and voter registration in another state -- isn't that enough to show I changed my domicile?
A: Establishing a new domicile is only one half of the test. You also have to show you abandoned your old Virginia domicile with no intent to return. If you keep an active Virginia license, Virginia-registered vehicles, a Virginia voter registration, or a Virginia home, the Department can find you never abandoned Virginia -- even if your new-state ties are completely genuine.

Q: Does it matter if I don't tell the Department whether I actually voted somewhere?
A: Yes. In this case, the husband disclosed his voter-registration status in both states but never disclosed his actual voting history despite repeated requests, and the Department treated that gap as significant. Virginia law also bars relief from an erroneous assessment where the taxpayer willfully failed or refused to provide required information.

Citations and references

• Va. Code § 58.1-302 (defines domiciliary resident and actual resident; both are subject to Virginia income tax)
• Va. Code § 58.1-205 (the taxpayer bears the burden of proving a change of domicile)
• Va. Code § 46.2-323.1 (a Virginia driver's license applicant must certify Virginia residency)
• Va. Code § 46.2-307 (a person validly licensed by another state may operate a motor vehicle in Virginia)
• Va. Code § 58.1-111 (assessments may be based on the best information available to the Department)
• Va. Code § 58.1-1826 (bars judicial relief from an erroneous assessment where attributable to the taxpayer's willful failure or refusal to provide required information)
• Va. Code § 24.2-101 (definition of "residence"/"resident" for Virginia election law, reflecting the domicile-and-abode voter qualification)
• Constitution of Virginia, Article II, Section 1 (voter qualifications require residency, which requires both domicile and place of abode)
• Coopers Adm'r v. Commonwealth, 121 Va. 338, 93 S.E. 680 (1917) (obtaining and using a Virginia voter registration is very strong evidence of Virginia domicile)
• Public Document 00-151 (8/18/2000) (an individual may successfully establish domicile outside Virginia even while retaining a Virginia driver's license)
• Public Document 02-149 (12/9/2002) (obtaining or renewing a Virginia driver's license is a strong indicator of intent to retain Virginia domiciliary residency)

Subject

Residency : Domicile - Change of Domicile

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 22-7

Original ruling text

January 11, 2022

Re: § 58.1-1821 Appeal: Individual Income Tax

Dear *:

This will respond 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, 2015, through 2018. I apologize for the delay in responding to your appeal.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayers, a husband and wife, may have been required to file a Virginia return for the 2015 taxable year. In response, the Taxpayers filed a Virginia nonresident return. Under review, the Department adjusted the return to a resident return and issued an assessment. The Department also issued assessments to the Taxpayers for the 2016 through 2018 taxable years on the basis that they were Virginia domiciliary residents. The Taxpayers appeal, contending the husband was a resident of * (State A).

DETERMINATION

Two classes of residents, a domiciliary resident and an actual resident, are set forth in Virginia 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 reside elsewhere. For a person to change domiciliary residency to another state or country, 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 or in another 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 order to change from one legal domicile to another legal domicile, there must be (1) actual abandonment of the old domicile, coupled with an intent not to return to it, and (2) an acquisition of a new domicile at another place, which must be formed by personal presence and an intent to remain there permanently or indefinitely. The burden of proving that the domicile has been changed lies with the person alleging the change.

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, situs of real or 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 the facts and circumstances of the particular case. A simple declaration is not sufficient to establish residency.

The Department determines a taxpayer’s intent through the information provided. A taxpayer has the burden of proving that he or she has abandoned his or her Virginia domicile. See Virginia Code § 58.1-205. If the information is inadequate to meet this burden, the Department must conclude that he or she intended to remain indefinitely in Virginia.

Wife

The information provided during the appeal lists the wife’s address as a residence in Virginia and indicates that the wife continues to maintain a Virginia driver’s license. Because the Taxpayers have not disputed her residency in the appeal, she is considered to have been a domiciliary resident of Virginia.

Husband

The husband asserts that he abandoned his Virginia domicile and established domicile in State A after his children reached adulthood. The husband provided evidence that he owned residential properties in State A, held a State A driver’s license, had motor vehicles registered in State A, was registered to vote in State A, and filed State A resident income tax and business franchise tax returns.

The husband also maintained numerous connections with Virginia. He owned a personal residence in Virginia, held a Virginia driver’s license, had motor vehicles registered in Virginia, was registered to vote in Virginia, and also received numerous information returns at the Virginia residence.

Virginia Code § 46.2-323.1 states, “No driver’s license ... shall be issued to any person who is not a Virginia resident.” In fact, this section states that every person applying for a driver’s license must execute and furnish to the Commissioner of the Department of Motor Vehicles (DMV) a statement that certifies that the applicant is a Virginia resident. The Department has found that an individual may successfully establish a domicile outside Virginia even if he retains a Virginia driver’s license. See Public Document (P.D.) 00-151 (8/18/2000). However, obtaining or renewing a Virginia driver’s license is considered to be a strong indicator of intent to retain domiciliary residency in Virginia. See P.D. 02-149 (12/9/2002). The husband’s Virginia driver’s license was issued in 2012 and was not relinquished until 2020.

The husband asserts that he maintained a Virginia driver’s license because he was required to hold one in order to operate a taxi cab in Virginia. In general, individuals who hold valid driver’s licenses issued by another state are permitted to operate motor vehicles in Virginia. See Virginia Code § 46.2-307. Therefore, if a taxpayer claims to reside permanently in another state, it would not normally be necessary for them to hold a Virginia driver’s license and a license from the other state at the same time, even if they could. Further, the Department is not aware of any statutes or ordinances that would require a driver who was already licensed by another state to obtain a Virginia driver’s license in order to operate a taxi cab in Virginia.

With regard to eligibility to vote, Article II, Section 1 of the Constitution of Virginia states in relevant part as follows:

In elections by the people, the qualifications of voters shall be as follows: Each voter shall be a citizen of the United States, shall be eighteen years of age, shall fulfill the residency requirements set forth in this section, and shall be registered to vote pursuant to this article.

The residence requirements shall be that each voter shall be a resident of the Commonwealth and of the precinct where he votes. Residence, for all purposes of qualification to vote, requires both domicile and place of abode.

The domicile and place of abode requirement found in the Constitution of Virginia is also reflected in the definition of “residence” or “resident” used in Virginia election statutes. See Virginia Code § 24.2-101. Consistent with the precedent established by the Virginia Supreme Court in Coopers Adm’r v. Commonwealth , 121 Va. 338, 93 S.E. 680 (1917), the Department will consider the fact that a taxpayer obtained a Virginia voter’s registration and voted in elections in Virginia to be very strong evidence that that individual considered Virginia to be his domicile during the time he held and used such registrations.

The husband submitted voter’s registration information for both Virginia and State A. He did not supply information on his actual voting history, however, although it was requested several times. Whether the husband actually used the registrations to vote in any elections would be an important factor to consider in determining domiciliary intent. The Taxpayers should be aware that Virginia Code § 58.1-1826 precludes a court from granting relief to taxpayers seeking correction of erroneous state tax assessments in cases in which the erroneous assessment is attributable to the taxpayer’s willful failure or refusal to provide the Department with necessary information as required by law.

The Department acknowledges that a change of domicile occurs as part of a process in which no single factor is dispositive. In this case, even if the husband’s connections with State A were sufficient to indicate the intent to establish domicile there, the extent of his ongoing Virginia connections does not indicate an intent to abandon his Virginia domicile. As stated above, both requirements must exist concurrently for a change of domicile to have occurred. As such, the assessments for the 2015 through 2018 taxable years are upheld.

The assessments at issue were made based on the best information available to the Department pursuant to Virginia Code § 58.1-111. The Taxpayers may have information that better represents their Virginia income tax liability for the taxable years at issue. Therefore, they should file Virginia resident income tax returns for the 2015 through 2018 taxable years to more accurately reflect their Virginia tax liability.

The returns should be submitted within 60 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy, Appeals and Rulings, P.O. Box 27203, Richmond, Virginia 23161-7203, Attention: *. Upon receipt, the returns will be reviewed and the assessments will be adjusted as appropriate. If the returns are not received within the allotted time, update bills with accrued interest to date will be issued based on the information currently available.

The Code of Virginia sections and public documents cited are available online at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/3362-C

Related Documents

00-151

02-149