I sold my Virginia home and moved to another state, but kept my Virginia driver's license because of pandemic DMV closures — am I still taxable as a Virginia resident?

Plain-English summary

A second taxpayer win issued the same day as its companion (a multi-state mover's case, decided March 5, 2025): here the Department abated a 2020 assessment because the taxpayer had genuinely moved to another state — with the sale of her Virginia home doing the heavy lifting.

How the case arose. IRS information suggested she should have filed a 2020 Virginia return; none was on file. The Department assessed her as a Virginia domiciliary resident; she appealed, contending she was a resident of State A.

The standard. Virginia taxes domiciliary residents (Virginia is the permanent home they intend to return to) and actual residents (an abode in Virginia more than 183 days) (Va. Code § 58.1-302). A domicile change requires (1) actual abandonment with intent not to return and (2) acquisition of a new domicile by presence plus intent to remain permanently or indefinitely (Cooper's Adm'r v. Commonwealth, 121 Va. 338, 347 (1917)); the burden is on the individual (23 VAC 10-110-30 B 3) and no single factor is dispositive.

Her move. In September 2019 she sold her Virginia residence; the next month she began living and working in State A. She filed both her State A resident return and her federal return for 2020 using her State A address, and remained in State A until June 2022.

The two Virginia leftovers — and why they didn't sink her:

• Virginia driver's license. Virginia law limits licenses to residents (Va. Code § 46.2-323.1), and obtaining or renewing one is a strong indicator of retained Virginia domicile (P.D. 02-149) — but merely retaining one doesn't preclude establishing domicile elsewhere (P.D. 00-151). Her explanation: State A's motor vehicle services were disrupted during the COVID-19 pandemic. The Department expressly found the retention "more understandable because of the disruption of government services."
• Virginia vehicle registration. The car stayed registered in Virginia because her daughter was using it at college.

The holding. Considering all the factors, she "adequately established her intent to abandon her Virginia domicile and establish domicile in State A" — with the sale of the Virginia residence singled out as "a very strong example" of that intent. Not domiciled in Virginia for 2020; assessment abated.

What this means for you

Selling the house is the strongest signal you can send

Virginia's domicile analysis weighs many factors, but this ruling says out loud what practitioners suspect: disposing of your Virginia residence is "a very strong example" of abandonment. Combine it with promptly living, working, and filing resident returns in the new state, and the burden of proof becomes carryable.

A retained license can be explained — in the right circumstances

Contrast this case with a companion 2025 ruling in this corpus where a COVID-era returnee renewed his Virginia license (and voted here) and lost: renewal or new issuance is a strong indicator of Virginia domicile, while mere retention with a credible reason — here, pandemic-era DMV disruption in the new state — can be excused. Document the reason contemporaneously if you're in this position.

Family use of a Virginia-registered car

Practical arrangements (a child using the car at college) can explain a lingering registration. As always, the totality controls — this taxpayer's core life had demonstrably moved.

Common questions

Q: What single fact mattered most?
A: The September 2019 sale of her Virginia residence — the Department called it "a very strong example" of her intent to abandon Virginia and establish a new domicile in State A.

Q: Isn't keeping a Virginia driver's license fatal to a domicile change?
A: No. Obtaining or renewing one is a strong indicator of Virginia domicile (P.D. 02-149), but retention alone doesn't preclude a change (P.D. 00-151) — and here the Department accepted her explanation that State A's motor vehicle services were disrupted during the COVID-19 pandemic.

Q: Why was the car still registered in Virginia?
A: Her daughter was using it at college. The Department accepted that explanation as part of the totality of the circumstances.

Q: What was the result?
A: The Department found she was not domiciled in Virginia for the 2020 taxable year and abated the assessment in full.

Citations and references

Statutes and regulations:

• Va. Code § 58.1-1821 — administrative appeal (application for correction) to the Tax Commissioner
• Va. Code § 58.1-302 — domiciliary resident and actual resident (more than 183 days) defined
• Va. Code § 46.2-323.1 — Virginia driver's licenses issued only to Virginia residents; residency certification
• 23 VAC 10-110-30 B 3 — burden of proof and factors for domicile changes

Authorities the Department relied on (described here, not linked): Cooper's Adm'r v. Commonwealth, 121 Va. 338, 347 (1917) (two-part test for changing domicile); P.D. 00-151 (8/18/2000) (a retained Virginia license doesn't preclude establishing domicile elsewhere); P.D. 02-149 (12/9/2002) (obtaining or renewing a Virginia license is a strong indicator of retained Virginia domicile).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-34

Original ruling text

March 5, 2025

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will respond to your letter in which you seek correction of the individual income tax assessment issued to * (the “Taxpayer”) for the taxable year ended December 31, 2020.

FACTS

The Department received information from the Internal Revenue Service (IRS) indicating that the Taxpayer may have been required to file a Virginia income tax return for the 2020 taxable year. A review of the Department’s records showed that the Taxpayer had not filed a return. The Department requested additional information from the Taxpayer in order to determine if her income was taxable in Virginia. Based on the information received, the Department determined that the Taxpayer was a domiciliary resident of Virginia and issued an assessment. The Taxpayer appeals, contending she 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 that person and the place to which that person intends to return even though they may be residing elsewhere. An actual resident of Virginia means a person who, for an aggregate of more than 183 days of the taxable year, maintained their place of abode within Virginia. A Virginia domiciliary resident continues to be subject to Virginia taxation even if they work in another state or country. 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 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. See Cooper's Adm’r v. Commonwealth , 121 Va. 338, 347 (1917). The burden of proof that an individual has abandoned or failed to establish domicile in Virginia rests with the individual. See Title 23 of the Virginia Administrative Code (VAC) 10-110-30 B 3.

The determination of whether a change of domicile has occurred is highly dependent on the facts and circumstances of the individual case, and no single factor is dispositive. Factors to be considered include, but are not limited to, the following:

sites of real and tangible property, location of savings and checking accounts, motor vehicle registration and licensing, motor vehicle operator’s license, voter registration, membership in clubs and civic groups, place of business, profession or employment, charitable contributions, location of schools attended by children, length of time of residence, place of birth and marriage, residence of family, reason for abandoning or acquiring domicile, and, in the case of a minor or married person, domicile of parents, husband, or wife and/or children.

The Taxpayer took steps to establish domicile in State A. In September 2019, she sold her Virginia residence. The next month, the Taxpayer began living and working in State A. She filed both her State A resident income tax return and her federal income tax return for the 2020 taxable year using her State A address. She remained in State A until June 2022. The Taxpayer, however, retained several connections with Virginia, namely her Virginia driver’s license and a vehicle registration.

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 they retain 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 Taxpayer explains that she retained her Virginia driver’s license because State A’s motor vehicle services were disrupted during the COVID-19 pandemic. In addition, the Taxpayer states that the vehicle remained registered in Virginia because her daughter was using it at college.

The Department acknowledges that a determination of a change in domicile is evidenced by a process in which no single factor is dispositive. After carefully considering all of the factors presented, the Department finds that the Taxpayer adequately established her intent to abandon her Virginia domicile and establish domicile in State A. In particular, the Department considers the sale of her Virginia residence to be a very strong example of her intent to abandon Virginia and establish a new domicile in State A. Further, the fact that she retained her Virginia driver’s license is more understandable because of the disruption of government services during the COVID-19 pandemic. Accordingly, the Department finds that the Taxpayer was not domiciled in Virginia in the 2020 taxable year. The assessment, therefore, will be abated.

The Code of Virginia sections and regulation cited are available online at law.lis.virginia.gov. The public documents cited are available at 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 and Legal Affairs, Tax Adjudication and Resolution Division, at or **@tax.virginia.gov.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR 4995.Q

Related Documents

00-151

02-149