Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
9/18/2019

23VAC10-110-30. Definitions.

A. Individual. An "individual" is any natural person, married or unmarried.

B. Resident.

1. Generally. For purposes of determining the income tax liability of any individual, the term "resident" includes (1) any individual domiciled in this Commonwealth (domiciliary resident), and (2) any individual who is not domiciled in this Commonwealth but who maintains a place of abode (actual resident) in Virginia for more than 183 days (in the aggregate) during the taxable year.

2. Actual resident. An individual may be an actual resident as defined in subdivision 1 of this subsection even though he retains his legal domicile elsewhere. The term "actual resident" does not include members of the United States Congress or members of the armed forces who are legally domiciled in another state. (For additional information on military and congressional personnel, see subdivisions 4 and 5 below.)

3. Domiciliary resident. A "domiciliary resident" is one whose legal domicile is Virginia. Most domiciliary residents actually live in Virginia; however actual presence in the state is not required. Any person who has not moved from the state with the intention of permanently residing outside of Virginia is still a domiciliary resident even though he may be actually living some place else.

A domicile once established continues until the individual moves to a new location with the bona fide intention of making his fixed and permanent home there.

A person can have only one domicile. If he has two or more places of abode, his domicile is the one which he regards and uses as his permanent home.

The determination of bona fide intention to change one's domicile is a factual matter which must be resolved on an individual case basis. In making this determination consideration is given to a number of factors, including, but 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. No single factor is dispositive in determining domicile; rather the factors are examined collectively to determine if the intent to acquire or abandon Virginia domicile exists. A simple declaration of intent to abandon domicile, or physical presence elsewhere is insufficient to abrogate Virginia domicile.

Additionally, the fact that an individual may have sold or disposed of his former home is not conclusive. Further, the fact that a person who has changed his place of abode to a location outside of Virginia but within six months of doing so again resides in Virginia constitutes prima facie evidence that no intent to abandon Virginia domicile existed. Where a question arises regarding an individual's domicile, the department may request such person to complete a questionnaire providing factual information relevant to the determination of intent to abandon Virginia domicile. Thus a change in domicile requires two concurrent actions--residence in a new locale and the intention to remain there indefinitely. The burden of proof that an individual has abandoned or failed to establish domicile in Virginia rests with the individual. For military personnel, see 23VAC10-110-130.

4. Members of Congress. Any member of the United States Congress who retains domicile in another state shall not be deemed a resident, actual or domiciliary, of Virginia. However, aides and other personnel employed by members of Congress will be deemed actual residents of Virginia, subject to Virginia income tax, if they reside in Virginia for more than 183 days during the taxable year, even though they retain legal domicile elsewhere.

5. Military personnel. Pursuant to 50 USC 574 (Soldiers and Sailors Civil Relief Act), a person does not abandon domicile in his home state solely by reason of absence in compliance with military or naval orders, nor shall such person be regarded as having acquired a domicile in any other state during the period of active duty. (For military personnel specifically, see 23VAC10-110-130.) For part-year residents, see 23VAC10-110-40.

C. Nonresident. A "nonresident" is any natural person who is not a resident, actual or domiciliary, of Virginia.

D. Income and deductions from Virginia sources. "Income and deductions from Virginia sources" includes, but is not limited to, items of income, gain, loss and deduction attributable to the following:

1. Ownership of any interest in real or tangible personal property in Virginia; or

2. A business, trade, profession, or occupation carried on in Virginia and income attributable to intangible personal property, to the extent that such property is employed by the taxpayer in a business, trade, profession, or occupation carried on in Virginia.

E. State. As used in 23VAC10-110-220, the word "state" shall mean any state of the United States and the District of Columbia. As used elsewhere in this chapter, the word "state" may or may not include U.S. territories and possessions.

F. Foreign source income.

1. Generally. As used in this chapter, the term "foreign source income" means income as defined in subdivision 2 below. Foreign source income does not include all income from sources outside of the United States, but is limited to the types of income enumerated below, and is further limited by the federal definitions in IRC §§ 861 through 864 and the regulations thereunder in determining the source of a particular item of income.

2. "Foreign source income" defined. "Foreign source income" is limited to the items enumerated in subdivisions a through d below.

a. Interest. "Interest" means that derived from sources outside of the United States, subject to the limitations of IRC §§ 861 through 864.

b. Dividends. "Dividends" means those derived from sources outside the United States, subject to the limitations of IRC §§ 861 through 864.

c. Rents, royalties, license and technical fees. "Rents, royalties, license and technical fees" mean those derived from property located outside of the United States or derived from services performed outside of the U.S. The term "technical fees" shall not include wages, salaries, compensation or other "earned income" as defined in IRC § 911(b). Fees for the use outside the U.S. of patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises and other like properties constitute "license and technical fees."

d. Gains. "Gains" means those gains and other income derived from the sale of intangible or real property located outside of the United States.

Statutory Authority

§§ 58.1-203 and 58.1-302 of the Code of Virginia.

Historical Notes

Derived from VR630-2-302; adopted September 19, 1984; revised eff. January 1, 1985 with retroactive effect according to Va. Code § 58-48.6 (recodified as Section 58.1-203).

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