I moved to another state for a permanent job, but COVID closed the office and I came back to Virginia — did I ever stop being a Virginia resident for income tax?

Plain-English summary

An IRS data match flagged a taxpayer who hadn't filed a 2020 Virginia return. The Department concluded he was a Virginia domiciliary resident entitled to a credit for tax paid to State A, and assessed. He appealed under Va. Code § 58.1-1821, contending he had become a State A resident when he moved there in October 2019 for a permanent position. The Tax Commissioner upheld the assessment: he never abandoned Virginia.

The move that didn't finish. He leased a State A residence through October 2020, had State A tax withheld, and left his belongings in a State A storage unit. But when his employer's offices closed during the COVID-19 pandemic, he let the lease expire to save expenses, returned to Virginia, and teleworked from his Virginia residence from early 2021 — not returning to State A until October 2023, more than two years after his employer's July 2021 return-to-office mandate.

The Virginia ties that decided it. Changing domicile requires (1) actual abandonment of the old domicile with no intent to return and (2) acquiring a new domicile by personal presence plus intent to remain permanently or indefinitely (Cooper's Adm'r v. Commonwealth, 121 Va. 338 (1917)); the burden is on the individual (23 VAC 10-110-30 B 3), and the assessment arrives presumed correct (§ 58.1-205). Against that standard:

• He renewed his Virginia driver's license in November 2020 — a year after the claimed move — and only Virginia residents may hold one (§ 46.2-323.1; renewing is a strong indicator of Virginia domicile, P.D. 02-149, though retention alone isn't always fatal, P.D. 00-151).
• He kept three vehicles registered in Virginia.
• He had been registered to vote in Virginia since 2013 and voted in Virginia in November 2020. Virginia voter residence constitutionally requires domicile plus place of abode (Va. Const. art. II, § 1; § 24.2-101), so the Department treats actively voting as a Virginia registrant as conclusive evidence of Virginia domicile.
• His 2020 State A nonresident return listed Virginia as his state of residence — his own filing said it.

His explanation — State A's licensing offices shut down in March 2020 before he could switch his license and registrations — didn't overcome the pattern. As the Department put it, someone making a permanent change of residence "would have no need to retain such connections" with the former state.

The consolation: the out-of-state credit. As a Virginia domiciliary who was an actual resident of State A, he can claim the § 58.1-332 A credit for State A income tax on earned income — limited to the lesser of the State A tax or the Virginia tax on that income (P.D. 97-301). The assessment had been computed on the best information available (§ 58.1-111), so he was directed to file a 2020 Virginia resident return claiming the credit within 30 days; otherwise the assessment stands, with an updated bill including accrued interest.

What this means for you

Anyone whose out-of-state move got interrupted

Domicile turns on completed acts, not plans. A genuine move that unravels — lease lapsed, returned to Virginia, worked from the Virginia house for years — reads as never having abandoned Virginia at all, especially when the official record (license, plates, voter rolls) stayed Virginian throughout. If circumstances force you back, understand that Virginia will likely treat the intervening period as continuous Virginia domicile.

Remote workers and pandemic-era movers

COVID disruptions don't relax the test. The Department acknowledged the shutdowns but still weighed the November 2020 license renewal and Virginia vote as decisive acts. If you truly changed states, change the paperwork the moment it's possible — and don't perform residency acts (voting, renewals) in the state you claim to have left.

The one silver lining

A failed domicile change doesn't mean double tax on the same wages: a Virginia domiciliary who actually resided and paid income tax in another state claims the § 58.1-332 credit, capped at the lesser of the two taxes. File the resident return to get it — silence leaves the best-information assessment in place.

Common questions

Q: He had a permanent job and an apartment in State A — why wasn't that a change of domicile?
A: Both prongs must be proven: abandonment of Virginia with no intent to return, and a new domicile formed by presence plus intent to remain. Renewing a Virginia license, keeping Virginia-registered cars, voting in Virginia, calling Virginia his residence on his own State A nonresident return, and returning to live in Virginia when the office closed all showed Virginia was never abandoned.

Q: How much does voting matter?
A: It's the heaviest factor: because Virginia voter residence requires domicile, the Department treats registering and actively voting in Virginia as conclusive evidence the voter considered Virginia home during that time.

Q: His State A DMV was closed during the pandemic — why didn't that excuse the Virginia license?
A: The problem wasn't just failing to get a State A license; it was affirmatively renewing the Virginia one (which requires certifying Virginia residency) and keeping three Virginia vehicle registrations — acts inconsistent with having left for good.

Q: Does he owe tax to both states now?
A: He's taxed by Virginia as a domiciliary resident, but he can claim a credit for the income tax he paid to State A on his earned income, limited to the lesser of the State A tax or the Virginia tax on that same income. He must file a 2020 Virginia resident return within 30 days to claim it.

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 and actual residents
• Va. Code § 46.2-323.1 — Virginia driver's licenses are limited to Virginia residents
• Va. Const. art. II, § 1 and Va. Code § 24.2-101 — voter residence requires domicile plus place of abode
• Va. Code § 58.1-205 — assessments are prima facie correct; burden on the taxpayer
• Va. Code § 58.1-332 A — the out-of-state credit and its lesser-of limitation
• Va. Code § 58.1-111 — best-information assessments for nonfilers
• 23 VAC 10-110-30 B 3 — burden of proof and the multi-factor domicile analysis

Authorities the Department relied on (described here, not linked): Cooper's Adm'r v. Commonwealth, 121 Va. 338 (1917) (the two-part test; voting as evidence of domicile); P.D. 00-151 (8/18/2000) and P.D. 02-149 (12/9/2002) (retained vs. renewed Virginia licenses); P.D. 97-301 (7/7/1997) (the credit's lesser-of limitation). The Department decided similar failure-to-abandon appeals that same spring (P.D. 25-67 and 25-68, both taxpayer losses on voting evidence) and one successful change (P.D. 25-56, where the taxpayer voted and got licensed in the new state).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-49

Original ruling text

April 16, 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 he had not filed a return. The Department requested additional information from the Taxpayer in order to determine if his income was taxable in Virginia. Based on the information received, the Department determined that the Taxpayer was a domiciliary resident of Virginia but was entitled to a credit for tax paid to * (State A) and issued an assessment accordingly. The Taxpayer appeals, contending he was a resident of State A.

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 explains that he lived and worked in Virginia until October 2019 when he moved to State A after accepting a permanent position with a State A employer. He leased a residence in State A through October 2020. He explains that he left State A in October 2020 because his State A employer’s offices had closed during the COVID-19 pandemic and that he let his State A residence lease expire to save expenses. He also explains that he left much of his belongings in a storage unit in State A because he intended to return once the pandemic shutdown ended. In addition, he had State A income tax withheld from his wages; however, he filed a State A nonresident return for 2020.

The Taxpayer also retained connections to Virginia. He maintained a Virginia driver’s license which he renewed in November 2020. He also owned three vehicles which were registered in Virginia. He has held a Virginia voter’s registration since 2013, and he voted in Virginia in November 2020. In addition, the Taxpayer’s 2020 State A nonresident return listed Virginia as his state of residence. Further, he returned to Virginia in early 2021 and teleworked from his Virginia residence. He did not return to State A until October 2023 even though his employer had mandated a return to the office in July 2021.

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).

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, the Department will consider the fact that an individual obtains a Virginia voter’s registration and actively votes as a Virginia resident in elections in Virginia to be conclusive evidence that that individual considered Virginia to be their domicile during the time they held and used such registration. See Coopers Adm’r, at 393.’

The Taxpayer explains that he maintained his Virginia driver’s license because he did not have time to obtain a State A driver’s license before the State A licensing facilities shut down in March 2020. He explains further that he maintained his Virginia vehicle registrations for the same reason.

Virginia Code § 58.1-205 provides that, in any proceeding relating to the interpretation of the tax laws of Virginia, an “assessment of a tax by the Department shall be deemed prima facie correct.” As such, the burden of proof is on the Taxpayer to show he was not subject to income tax in Virginia.

As stated above, a change of domicile requires that an individual prove two elements concurrently: 1) that the individual abandoned the old domicile and had no intent to return to it; and 2) that the individual established a new domicile, which must have been formed by physical presence coupled with the intent to remain permanently or indefinitely. The Department expects that, when individuals are seeking a permanent change of domicile, they will normally register vehicles, obtain a new driver’s license, register to vote, and perform other official acts indicating their intent to change domicile. To the extent such connections may be retained with Virginia, it suggests that the individual may not have been certain that they intended to abandon their Virginia domicile. If a permanent change of residence were intended, there would be no need to retain such connections with a former state.

Credit for Taxes Paid to Another State

Virginia Code § 58.1-332 A allows Virginia residents a credit on their Virginia return for income taxes paid to another state provided the income is either earned or business income or gain from the sale of a capital asset. The intent of the credit is to grant Virginia residents relief in situations when they are taxed by both Virginia and another state on these types of 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). The limitation is computed by multiplying the individual’s Virginia tax liability by a fraction, the numerator of which is the income upon which the other state’s tax is imposed, and the denominator of which is Virginia taxable income. As an actual resident of State A and a domiciliary resident of Virginia, the Taxpayer would have been allowed a credit against his Virginia income tax liability for income tax paid to State A to the extent permitted by Virginia Code § 58.1-332.

CONCLUSION

In this case, the Taxpayer’s ongoing connections with Virginia raise significant doubts as to his intent to abandon his Virginia domicile. In particular, using a Virginia voter’s registration to vote during the period when he was not actually residing in Virginia and listing Virginia as his state of residence on his State A nonresident income tax return are significant factors evidencing domiciliary intent.

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 reviewing all of the information provided, the Department finds that that the Taxpayer has failed to prove that he abandoned his Virginia domicile as of the 2020 taxable year. Therefore, he remained subject to income tax as a domiciliary resident of Virginia. The Taxpayer will, however, be able to claim a credit for the income tax he paid to State A.

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 his Virginia income tax liability for the taxable year at issue. Therefore, he should file a 2020 Virginia resident income tax return and claim credit for income tax paid to State A to the extent permitted by Virginia Code § 58.1-332. The return should be submitted within 30 days from the date of this letter to: Virginia Department of Taxation, Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, P.O. Box 27203, Richmond, Virginia 23261, Attention: *. The return will be reviewed and processed, and the assessment will be adjusted as warranted. If the return is not received within the allotted time, the assessment will be considered correct.

After any applicable adjustments have been made, the Taxpayer will receive an updated bill that will include accrued interest to date. The Taxpayer should remit the balance due within 30 days of the bill date to avoid the accrual of additional interest and possible collection actions.

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 **.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4980.X

Related Documents

97-301

00-151

02-149