Did a husband become domiciled in Virginia because he spent substantial time there caring for his ill wife?

Plain-English summary

Virginia concluded that the husband did not abandon his other-state domicile merely by spending substantial time in Virginia to care for his wife. The wife moved to Virginia for treatment near the state border, while he continued traveling between the two homes.

He retained an out-of-state driver's license, vehicle registrations, voting, residence, and federal-return address. The condominium entered an onsite rental program during extended absences, but he explained that as a practical response to his wife's health needs.

Virginia ties included an abode, a registered vehicle, financial mail, and more time spent there than elsewhere. Still, he stayed fewer than 183 days in each year, and the purpose of the stay was spousal care rather than an intent to remain permanently.

Virginia found the burden met and abated both assessments.

What this means for you

• Domicile turns on intent shown by the complete pattern of conduct.
• Medical or caregiving presence does not automatically establish domicile.
• Keep day counts below or above the 183-day actual-residency threshold.
• Explain temporary rentals and maintain consistent home-state ties.

Citations and references

• Va. Code § 58.1-302.

Subject

Taxpayer did not intend to abandon his State A domicile

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 11-129

Original ruling text

July 20, 2011

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 your client, * (the "Taxpayer"), for the taxable years ended December 31, 2007 and 2008.

FACTS

The Taxpayer and his wife moved to * (State A) in 1995. For many years, the wife had been diagnosed with a debilitating disease for which she has been receiving treatment in *** (State B), which borders Virginia. The Taxpayers maintained a residence in Virginia where they would return in order for the wife to receive treatments. Eventually, the wife moved to Virginia permanently while the Taxpayer continued to travel back and forth to State A.

The Department audited the Taxpayer and concluded that he established a domiciliary residence in Virginia. Assessments for additional individual income tax and interest were issued for the 2007 and 2008 taxable years. The Taxpayer appeals the assessments, contending he continues to maintain his domicile in State 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 a taxpayer and the place to which he intends to return even though he may actually reside elsewhere. 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 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, sites of real and 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 of the facts and circumstances of the particular case. A simple declaration is not sufficient to establish domicile.

The Department concedes that it is difficult to know whether a taxpayer intends to return to Virginia. The Department determines a taxpayer's intent through the information provided. If the information is inadequate to meet his or her burden, the Commissioner must conclude that he or she intended to remain indefinitely in Virginia.

The Taxpayer performed several actions consistent with maintaining his domicile with State A. He held a State A driver's license, maintained motor vehicles registered in State A and voted in State A elections. The Taxpayer maintained a residence in State A, and used its address when filing his federal income tax returns. However the information provided, indicates the property was reported as rental property for federal income tax purposes during the taxable years in question. The Taxpayer explains he took advantage of the onsite rental program of his, condominium association to rent the property in view of this extended absences because of the health needs of his wife.

The Taxpayer also performed a number of actions indicative of establishing a Virginia domicile. The Taxpayer maintained a place of abode and a registered motor vehicle in Virginia. He received financial statements at his Virginia address. Further, for the taxable years at issue, the Taxpayer spent significantly more time in his Virginia residence caring for his wife, than in State A or any other state. However, the Taxpayer did not stay in Virginia more than 183 days in 2007 or 2008.

Based on all the facts presented, I find that: the Taxpayer has met his burden of proving that he did not intend to abandon his State A domicile. The Taxpayer's stay in Virginia was strictly related to the care of his wife. Though he is renting his residence during his absence from State A, he continues to maintain multiple domiciliary factors there. Accordingly, the assessments for the 2007 and 2008 taxable years will be abated.

The Code of Virginia section and public documents 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 * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1-4517056371.D