I moved to another state and vote there, but I still own rental houses in Virginia and kept my Virginia driver's license. Am I still taxed as a Virginia resident?

Plain-English summary

The Department assessed this taxpayer as a Virginia domiciliary resident for 2019 after IRS data showed she had not filed a Virginia return. She appealed, saying she lived in another state ("State A"). The Tax Commissioner agreed she had changed her domicile and abated the assessment — but flagged a separate Virginia filing obligation tied to her rental property.

The decisive factor: voting. The taxpayer moved in 2015 into a State A home she had owned since 1996, obtained a State A identification card, and — the point the Commissioner leaned on hardest — registered to vote and voted in State A. Virginia's long-standing rule is that registering to vote and voting in Virginia is strong evidence of intent to remain domiciled here (a person must be a Virginia domiciliary to vote here). The Department applies that rule in reverse: voting in another state is very strong evidence that you consider that state your domicile. That tipped the analysis in her favor.

Why her retained Virginia ties didn't sink her. She kept two Virginia houses (rented to family members), Virginia-registered vehicles, and a Virginia driver's license she renewed in 2017. A Virginia license is normally a strong indicator of Virginia intent (§ 46.2-323.1), but it is not decisive, and here it was outweighed. She explained she obtained a State A ID card rather than a driver's license because she did not drive in State A, and kept the Virginia vehicles so family could use them — explanations the Commissioner accepted. Weighing everything (no single factor controls), the Department found she abandoned her Virginia domicile before 2019, and the assessment was abated.

The catch — a nonresident still owes Virginia on Virginia-source income. Winning the domicile fight did not end her Virginia filing duty. She still owned two Virginia houses that she rented out, and leasing property in Virginia is carrying on a business in Virginia (§ 58.1-302, § 58.1-325). A nonresident with Virginia-source income must file a nonresident return (Form 763) if total income exceeds the filing threshold (§ 58.1-341, § 58.1-321). Crucially, the Commissioner said this holds even if the rental operated at a loss: the filing threshold is measured against her overall "Virginia adjusted gross income" (which she exceeded), so a money-losing rental does not excuse the return. She was instructed to file a 2019 nonresident return, and one for any other year she had Virginia rental income and enough total income to cross the threshold.

What this means for you

People who moved out of Virginia and vote in their new state

Registering to vote and actually voting in your new state is one of the strongest things you can do to show you've abandoned Virginia domicile — the mirror of Virginia's rule that voting here proves Virginia intent. If you've genuinely relocated, get on the voter rolls where you live. Conversely, continuing to vote in Virginia after "moving" badly undercuts a claim that you left.

If you keep a Virginia license or vehicles after moving

They count against you but are not fatal, especially with a plain explanation (here: an out-of-state ID instead of a license because she didn't drive there, and vehicles kept for family). Still, the cleanest record aligns your license, registrations, and voter registration all in your new state.

Nonresidents who still own Virginia rental property — read this

This is the practical sting of the ruling. Owning and renting out Virginia real estate is Virginia-source business income, and it can force a Virginia nonresident return even though you live elsewhere — and even in a year the rental loses money. That's because the duty to file turns on your total income clearing the filing threshold, not on whether the Virginia rental itself was profitable. If you left Virginia but kept a rental house here, budget for an annual Form 763 in any year your overall income is above the threshold.

Tax preparers

Build the domicile case around voter registration and voting where you can — the Department treats it as very strong. Then separately screen every nonresident client for Virginia-source income (rents, a Virginia business, Virginia property sales, certain Virginia gambling/lottery winnings). A domicile win plus unfiled nonresident returns is a common trap; a loss-year rental does not get your client off the hook.

Common questions

Q: I registered to vote and voted in my new state. Does that prove I left Virginia?
A: It's very strong evidence. Virginia treats voting in another state as strong proof you consider that state your domicile — the flip side of its rule that voting in Virginia shows Virginia intent. It was the key factor the Commissioner relied on to abate this assessment.

Q: I kept my Virginia driver's license after moving. Does that keep me a Virginia resident?
A: Not by itself. A Virginia license is a strong indicator of Virginia intent, but it can be outweighed by stronger evidence of a new domicile — here, voting in the new state — and by a credible explanation for keeping it.

Q: I moved away but still rent out a house in Virginia. Do I have to file a Virginia return?
A: Likely yes, as a nonresident. Renting Virginia property is Virginia-source business income, and a nonresident whose total income exceeds the filing threshold must file a Virginia nonresident return (Form 763) — even if the rental itself ran at a loss that year.

Q: My Virginia rental lost money this year. Do I still have to file?
A: Yes, if your overall income is above the filing threshold. The Commissioner was explicit that a rental operating at a loss does not eliminate the nonresident filing requirement, because the threshold is measured against your total Virginia adjusted gross income, not the rental's bottom line.

Citations and references

Statutes and regulations:

• Va. Code § 58.1-1821 — application to the Tax Commissioner to correct an assessment
• Va. Code § 58.1-302 — domiciliary vs. actual residency; definition of income from Virginia sources
• Va. Code § 58.1-321 — filing threshold, measured by Virginia adjusted gross income
• Va. Code § 58.1-325 — nonresidents with Virginia-source income are taxed as nonresidents
• Va. Code § 58.1-341 — nonresident filing requirement (Form 763)
• Va. Code § 46.2-323.1 — Virginia driver's licenses issued only to certified residents
• Va. Code § 46.2-348 — penalty for a false statement to a Commonwealth agency
• 23 VAC 10-110-30 B 3 — burden on the individual to prove a change of domicile
• 23 VAC 10-110-180 A — computing a nonresident's Virginia taxable income by the Virginia-source ratio

Authorities the Commissioner relied on (described here, not linked): Cooper's Adm'r v. Commonwealth, 121 Va. 338 (1917) (voting as evidence of domicile; presence-plus-intent); and prior Department public documents on the voting and driver's-license factors and on the nonresident rental-filing rule (P.D. 00-151, 02-149, 07-148, 17-97, 17-133, 18-84).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-105

Original ruling text

September 24, 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 you (the “Taxpayer”) for the taxable year ended December 31, 2019.

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 2019 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 Taxpayer’s response, the Department determined that the Taxpayer was taxable as a domiciliary resident of Virginia and issued an assessment. The Taxpayer applied for correction, contending she was a resident of * (State A) during 2019.

DETERMINATION

Residency

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. Id .

The Taxpayer engaged in actions consistent with establishing domicile in State A. In 2015, she moved out of her Virginia residence and into a residence, located in State A, which she had owned since 1996. In addition, the Taxpayer obtained a State A identification card and registered to vote in State A in 2015. She also obtained a State A driver’s license in 2023. The Taxpayer has resided in State A since 2015 and has returned to Virginia only occasionally to visit family.

The Taxpayer, however, also maintained various connections with Virginia. She owned two residences in Virginia which were rented to family members. The Taxpayer also owned vehicles that were registered in Virginia, and she maintained a Virginia driver’s license, which she renewed in 2017.

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).

In addition, the Department considers registering to vote in Virginia and voting in Virginia elections as strong evidence of an intent to remain domiciled in Virginia. See Cooper’s Adm’r, 121 Va. at 349. 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).

Consistent with the Department’s policy with respect to registering to vote and voting in Virginia, the Department considers the fact that a taxpayer obtained a voter’s registration and voted in elections in another state as very strong evidence that such individual considered the other state to be their domicile during the time they held and used such registration.

The Taxpayer explains that she obtained a State A identification card rather than a driver’s license because she did not drive in State A. She further explains that she renewed her Virginia driver’s license as a convenience to use when visiting family in Virginia. In addition, the Taxpayer states that she maintained vehicles garaged and registered in Virginia so her family members would have a means of transportation and she could use them when visiting.

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 information presented, the Department finds that the Taxpayer adequately established her intent to abandon her Virginia domicile and establish domicile in State A prior to the 2019 tax year. In particular, the Department considers the fact that she voted in State A to be strong evidence of her intent to abandon Virginia and establish a new domicile in State A. Further, the fact that she maintained her Virginia driver’s license and obtained a State A identification card rather than a driver’s license is understandable because she did not drive in State A. Accordingly, the Department finds that the Taxpayer was not domiciled in Virginia during the 2019 taxable year. The assessment, therefore, will be abated.

Nonresident Individuals

Under Virginia Code § 58.1-325, individuals who are neither domiciliary nor actual residents of Virginia and have income from Virginia sources are taxed as nonresidents. Virginia Code § 58.1-302 limits the term income and deductions from Virginia sources to the items of income, gain, loss, and deductions attributable to the ownership of property in Virginia or the conduct of a business, trade, profession, or occupation in Virginia. Leasing property in Virginia is conducting a business in Virginia for Virginia income tax purposes.

In accordance with Title 23 VAC 10-110-180 A, the Virginia taxable income of a nonresident is computed by multiplying their Virginia taxable income (computed as if they were a resident) by the ratio of their net income, gain, loss, and deductions from Virginia sources to their net income, gain, loss, and deduction from all sources. Thus, a nonresident individual who has income from carrying on a business, trade, profession, or occupation within Virginia is required to file a Virginia Nonresident Individual Income Tax Return, currently Form 763, pursuant to Virginia Code § 58.1-341, unless the individual meets the filing exception described in Virginia Code § 58.1-321. See P.D. 07-148 (9/12/2007).

For purposes of determining whether the threshold has been met, a taxpayer’s federal adjusted gross income (FAGI) is taken into account, along with certain additions to, or subtractions from, FAGI that are specifically set out in Virginia statutes. This amount is referred to as “Virginia adjusted gross income.” See Virginia Code § 58.1-321. In this case, it appears that the Taxpayer’s Virginia rental properties operated at a loss in 2019. The Taxpayer, however, had sufficient Virginia adjusted gross income, as defined, to exceed the filing threshold under Virginia Code § 58.1-321. The fact that the rental property may have been operating at a loss did not eliminate the requirement to file a return. If an individual owns property in Virginia that produces rental income, it is the Department’s position that the individual must file a nonresident return regardless of whether the net amount of Virginia taxable income ultimately computed is positive or negative. See P.D. 17-133 (7/19/2017).

CONCLUSION

While the Department concedes that the Taxpayer was not a domiciliary resident of Virginia for the taxable year at issue, she should be aware that continuing connections with Virginia, such as maintaining vehicle registrations, will likely result in future contacts by the Department with respect to the situs of the Taxpayer’s domicile. As in any determination, a change in the facts and circumstances could result in a change in the Department’s determination in subsequent taxable years. In addition, the Taxpayer should be aware that Virginia law does not permit nonresidents to obtain Virginia driver’s licenses, and persons providing a false statement to an agency of the Commonwealth may be subject to penalty under Virginia law. See Virginia Code § 46.2-348.

Finally, pursuant to Virginia Code § 58.1-341, if a taxpayer receives income from operating a rental property in the state or otherwise has Virginia source income and the taxpayer has sufficient Virginia adjusted gross income to exceed the filing threshold under Virginia Code § 58.1-321, then the taxpayer must file a return regardless of whether the property may have been operating at a loss. Accordingly, the Taxpayer is instructed to file a 2019 nonresident return, and a return for any other year she received income from operating a rental property in Virginia and otherwise had sufficient total income to exceed the filing threshold described in Virginia Code § 58.1-321.

The Code of Virginia sections and regulations 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 **.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4796.Y

Related Documents

00-151

02-149

07-148

17-97

17-133

18-84