I'm away at college in another state -- does that make me a resident there instead of Virginia for state income tax purposes?

Plain-English summary

The IRS flagged that a taxpayer may have owed Virginia income tax for 2018 but hadn't filed a Virginia return. After the Department gathered information, it determined she'd remained a Virginia domiciliary resident and issued an assessment. She appealed, arguing she'd become a resident of "State A," where she attended college from 2015 to 2019.

The Department applied a settled rule: a change in domicile requires (1) actually abandoning the old domicile with no intent to return, and (2) physically moving to and intending to permanently or indefinitely remain at the new one -- and the taxpayer carries the burden of proving both. Attending college somewhere doesn't, on its own, meet that bar; the Department's stated experience is that college students rarely establish domicile where they attend school, and instead typically stay domiciled wherever they were domiciled when they enrolled. Here, the taxpayer lived in Virginia before starting college. During 2018 she also did a paid summer internship in a different state ("State B") and filed a nonresident return there reporting those wages.

Several facts cut against a domicile change to State A: she obtained a Virginia driver's license in 2016 and kept renewing it; she registered to vote in Virginia in 2018 and was still registered at least through 2020, using that registration to vote in 2021; and her State B nonresident return, federal return, and W-2s all listed a Virginia address (her mother's home). Renewing a Virginia driver's license is treated as a strong indicator of intent to keep Virginia domicile, and Virginia voter registration -- which requires being a Virginia domiciliary resident under the state constitution -- is likewise strong evidence of an intent to stay domiciled in Virginia. Weighing everything, the Department found she remained a Virginia domiciliary resident throughout 2018 and owed Virginia tax on all of her income for that year, including the State B internship wages -- but since she'd already paid State B tax on those same wages, she was entitled to a credit against her Virginia tax (capped at the lesser of the two amounts).

What this means for you

College students (and their families) assuming a home-state address doesn't matter while at school

Simply living and attending school in another state, without more, isn't enough to change your tax domicile away from where you lived before college. The Department's default assumption runs the other way -- that you remain domiciled where you were before you enrolled -- and you carry the burden of proving otherwise.

Anyone who keeps a driver's license, voter registration, or a parent's address in their home state "just in case"

Each of those is treated as meaningful evidence of an intent to keep that state as your domicile -- renewing a Virginia driver's license, actively voting using a Virginia registration, and listing a Virginia address on your tax filings all reinforced the conclusion here that Virginia domicile was never abandoned.

Students who take a paid internship or job in a different state during the school year or summer

Filing a nonresident return and paying tax to that state doesn't excuse you from also filing in your actual domicile state if you're still domiciled there -- but you can generally claim a credit against your home-state tax for the amount you already paid to the internship state on that same income.

Common questions

Q: Does going away to college in another state change my state tax domicile?
A: Not by itself. The Department's experience is that college students rarely establish a new domicile where they attend school; you generally remain domiciled wherever you were domiciled before enrolling, unless you take further, independent steps to show you intend that new place to be your permanent home.

Q: I have a driver's license and voter registration in my home state, but I live at school most of the year -- does that matter?
A: Yes. Renewing a driver's license in your home state is treated as strong evidence you intend to keep that domicile, and actively voting there using your registration is treated the same way -- both worked against this taxpayer's claimed domicile change.

Q: I did a paid summer internship in another state and paid tax there -- do I still owe tax in my home state too?
A: If you remain domiciled in your home state, yes -- you owe tax there on all your income, including internship wages earned elsewhere. But you can generally claim a credit for the tax you already paid the internship state, limited to the lesser of what you paid there or what your home state would otherwise charge on that same income.

Citations and references

• Va. Code § 58.1-302 (domiciliary resident and actual resident defined)
• Va. Code § 46.2-323.1 (driver's license applicants must certify Virginia residency)
• Va. Code § 58.1-332(A) (credit for income tax paid to another state, limited to the lesser amount)
• Va. Code § 58.1-111 (assessment based on best information available)
• Cooper's Adm'r v. Commonwealth, 121 Va. 338, 349, 93 S.E. 680, 683 (1917) (registering and voting in Virginia is strong evidence of intent to remain domiciled there)
• P.D. 97-301 (7/7/1997) (credit limited to the lesser of tax paid to the other state or Virginia tax on the same income)
• P.D. 00-151 (8/18/2000) (a taxpayer can establish domicile outside Virginia even while retaining a Virginia driver's license)
• P.D. 02-149 (12/9/2002) (obtaining/renewing a Virginia driver's license is a strong indicator of intent to retain Virginia domicile)
• P.D. 11-121 (6/30/2011) and P.D. 19-91 (8/16/2019) (college students rarely establish domicile where they attend school)
• P.D. 17-97 (6/12/2017) and P.D. 18-84 (5/9/2018) (Virginia domiciliary residency is required to vote under the Virginia Constitution)

Subject

Residency ; Domicile - Failure to abandon Virginia domicile Credit : Tax Paid Other States - Wages earned in another state

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 22-124

Original ruling text

August 3, 2022

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 assessment issued to * (the “Taxpayer”) for the taxable year ended December 31, 2018.

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 2018 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 provided, the Department determined that the Taxpayer had retained a Virginia domicile and issued an assessment for the year in question. The Taxpayer appeals, contending she was a resident of * (State A).

DETERMINATION

Domicile

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. If the information is inadequate to meet this burden, the Department must conclude that he or she intended to remain indefinitely in Virginia.

The Taxpayer attended college in State A from 2015 to 2019. Prior to enrolling in college, the Taxpayer lived in Virginia. In 2018, the Taxpayer participated in a summer internship in * (“State B”) and filed a 2018 State B nonresident tax return, reporting wages earned during the internship.

The Taxpayer performed a number of actions consistent with maintaining domicile in Virginia. She obtained a Virginia driver’s license in 2016 and has continued to maintain it. The Taxpayer also registered to vote in Virginia in 2018 and continued to hold such registration at least until 2020 when she used it to vote that year. In addition, the Taxpayer’s 2018 State B nonresident income tax return, federal income tax return, and W-2 statements had a Virginia address which the Taxpayer states was her mother’s 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).

In addition, registering to vote in Virginia and voting absentee in Virginia elections is also strong evidence of an intent to remain domiciled in Virginia. See Cooper’s Adm’r v. Commonwealth , 121 Va. 338, 349, 93 S.E. 680, 683 (1917). The Department has consistently found that individuals must be domiciliary residents of Virginia in order to be eligible to vote under the Constitution of Virginia . See P.D. 17-97 (6/12/2017) and P.D. 18-84 (5/9/2018).

Further it has been the Department’s experience that college students rarely establish domicile where they attend college. As such, most college students will remain domiciled where they were domiciled at the time they entered college. See P.D. 11-121 (6/30/2011) and P.D. 19-91 (8/16/2019). There is no indication that the Taxpayer established the type of permanent connections in State A that would indicate she intended to establish a new domicile there.

The Department acknowledges that a change of domicile occurs as part of a process in which no single factor is dispositive. After carefully considering all of the evidence presented, I find that the Taxpayer was domiciled in Virginia in 2018. Accordingly, she was taxable on her entire income as a Virginia resident.

Credit for Taxes Paid to Another State

Virginia Code § 58.1-332 A allows Virginia residents a credit on their Virginia income tax return for taxes paid to another state provided the income is either earned or business income. Virginia law does not necessarily allow a taxpayer to claim a credit for the total amount of tax paid to another state. Rather, the credit is limited to the lesser of the amount of tax actually paid to the other state or the amount of Virginia income tax actually imposed on the taxpayer on the income earned or derived in the other state. See P.D. 97-301 (7/7/1997).

In this case, the Taxpayer paid income tax to State B on wages earned there. Under these circumstances, the Taxpayer may be able to claim a credit for taxes paid to State B on her Virginia resident income tax return.

CONCLUSION

Because the Taxpayer was required to file a Virginia income tax return, the Department was correct in issuing the assessment. The assessment at issue was made based on the best information available to the Department pursuant to Virginia Code § 58.1-111. The Taxpayer, however, may have information that better represents her Virginia income tax liability for the year at issue. Therefore, the Taxpayer should file a 2018 Virginia resident income tax return.

The return 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 return will be reviewed and the assessment will be adjusted, as appropriate. If the return is not received within the allotted time, the assessment will be considered to be correct.

In addition, the Taxpayer should be aware that having continuing connections with Virginia, such a Virginia driver’s license or voter’s registration will likely result in future contacts by the Department with respect to the situs of the Taxpayer’s domicile. If the Taxpayer’s intent is to abandon her Virginia domicile and establish domicile elsewhere, she should relinquish such connections and obtain them in the location she now considers to be her domicile.

The Code of Virginia sections and public documents cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions 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/4115.Y

Related Documents

97-301

00-151

02-149

11-121

17-97

18-84

19-91