Current through February, 2024
Reg.§
1. 5811(11),
§ 1.5401(7), (14) § 1.6066(c) DOMICILE (Effective 8/7/04)
Section 1 Introduction
Domicile is a legal concept that has implications for Vermont
income tax, the statewide education tax and property tax adjustments.
With regard to income tax, resident individuals are taxed on
more of their taxable income than nonresidents. An individual qualifies for
residency for the portion of the year in which the individual is domiciled in
the state.
32 V.S.A. §
5811(11).
The statewide education tax is affected because the tax is
imposed at different rates on homestead property and nonresidential property. A
homestead is the principal dwelling owned and occupied by a resident individual
as the individual's domicile.
32 V.S.A. §
5401(7). Domicile is defined
with respect to the statewide education tax at
32 V.S.A. §
5401(14).
Finally, to be eligible for a property tax adjustment under
Chapter 154 of Title 32, a claimant must be domiciled in the state.
32 V.S.A. §
6066(c).
This rule provides guidelines that are consistent with the
definition in
32 V.S.A. §
5401(14) for determining
domicile. It further clarifies that domicile has the same definition for
purposes of income tax, statewide property tax and property tax
adjustments.
Section 2
Definition of Domicile
(a) Domicile means the
place where an individual has a true, fixed permanent home, and to which place,
whenever the person is absent, he or she has the intention of returning. An
individual may have several places of abode in a year, but at no time can he or
she have more than one domicile. Domicile is not limited to a specific
structure, but refers rather to a place or an area to which the individual
expects to return.
(b) Domicile is
established by birth, operation of law, or choice.
(c) Once established, domicile is never lost,
changed or destroyed unless there is an actual change in the residence,
together with steps manifesting an intention to abandon the former residence
and acquire a new one. A mere intent or desire to make a change in domicile is
not sufficient to effectuate a change; voluntary and positive steps must be
taken.
(d) Domicile does not change
if an individual leaves his or her place of domicile:
1. for a period of rest or
vacation;
2. to complete a
particular transaction, perform a particular contract, or fulfill a particular
engagement, but intends to return to the state whether or not the transaction,
contract or engagement is completed; or
3. to accomplish a particular purpose, but
does not intend to remain in the new place once the purpose is
accomplished.
(e) An
individual who is in transit between old and new domiciles is domiciled in the
old domicile until the new one is established.
Section 3 Relevant Factors
The factors which are deemed of primary relevance to a fair
determination of an individual's domicile are the facts and circumstances that
are not readily changeable by the taxpayer in order to alter their domicile for
tax reasons. The following factors, in no particular order, shall be considered
in determining an individual's domicile.
(a) Home. The Department will consider what
residences are owned or rented (for the taxpayer's use) by the taxpayer; where
they are located; how they are used; and the sizes, values and uses of each
residence.
(b) Time. The Department
will consider where and how the individual spends time during the tax year;
whether the taxpayer is retired or actively involved in a business or
profession; how much the individual travels; the nature of the travel; where
the individual spends time when not required to be at a location for employment
reasons, and the overall pattern of residence of the individual.
(c) Items Near and Dear. The Department will
consider where items or possessions that the individual considers "near and
dear" to his or her heart are located, e.g. items of significant sentimental
value, family heirlooms, collections of valuables or possessions that enhance
the quality of the individual's life.
(d) Active Business Involvement. The
Department will consider how the individual earns a living; where the
individual's place of employment is; whether the individual is actively
involved in any business ownership or professions, and if so, the degree; where
the business or professional office is located and the proportion of in-state
to out-of-state business activities. "Actively involved" means the individual
participates in the day-to-day operation, or in a policy-making position, of a
business.
(e) Family Connections.
The Department will consider where members of the individual's immediate family
reside; where minor children attend school, and the type of school facility.
"Immediate family" means the spouse, civil union partner, child, or parent of
an individual.
Other factors which may be considered include home address
and legal residence listed on federal tax returns, place where the individual
is registered to vote, place of vehicle registration, state of driver's or
professional license, place of club and organization memberships, place where
mail is received. There may be other similar factors. However, because these
factors may be altered without a true commitment to such location they will
generally not carry as much weight as factors (a) through (e) above.
Charitable contributions shall not be considered in
determining domicile. "Charitable contribution" means the donation of property,
money, or uncompensated time to an organization that qualifies for a federal
deduction.
Section
4 Intent to Change Domicile
(a)
Intent is a decisive factor in the determination of whether a place which a
person occupies is his or her domicile. Since a domicile continues until
superseded by another, a change of residence without the intention of creating
a new domicile leaves the last established domicile unaffected. Change of
domicile may be made on a whim or fancy, for business, health, or pleasure, to
secure a change of climate, or for any other reason, provided there is an
absolute and fixed intention to abandon one domicile and acquire another, and
the acts of the individual confirm this intention. The fact that a person is
motivated by self-interest does not prevent a change of domicile. Nearly
everyone who changes domicile does so because they believe it to be to their
advantage in one way or another. Therefore, the fact that a change of domicile
was motivated primarily by a desire to gain a tax advantage is immaterial if
the intention of the individual to acquire a new domicile is absolute and fixed
and the actions of the individual confirm that intention.
(b) In addition to the factors addressed in
Section
3
above, the following factors will be considered with respect to a claimed
change of domicile.
1. location of domicile
for prior years;
2. registration as
voter;
3. voting by absentee
ballot;
4. place of filing of
federal income tax returns;
5.
filing and payment of state income taxes;
6. declaration of place of residence in
will;
7. recitals in deeds and
legal documents;
8. written and
oral declarations generally;
9.
situs of bank accounts and securities;
10. membership in churches, clubs, lodges,
societies;
11. automobile
registration and license;
12.
claiming or filing homestead exemptions;
13. school attended by minor children.
None of these factors will be conclusive. They will be
weighed in view of all the facts and circumstances known to the Department. A
declaration of intent to abandon domicile is insufficient alone to abrogate
Vermont domicile. Physical presence elsewhere is also insufficient by itself to
abrogate Vermont domicile.
Section 5 Burden of Proof
(a) The party claiming domicile, or a change
of domicile, shall carry the burden of proof.
(b) The evidence required to establish both a
change of residence and the intention to effect a change of domicile must be
clear and convincing. The intent to change a domicile must be manifested by
unequivocal acts.
(c) A person's
course of conduct is accorded more weight than self-serving declarations of
domicile.
(d) An individual trying
to establish Vermont as his or her domicile shall be subject to the same burden
of proof as an individual claiming to have abandoned Vermont as his or her
domicile.
Section 6
Married Individuals
It is presumed that the domiciles of a husband and wife or
civil union partners are the same, unless there is affirmative evidence to the
contrary. However, spouses who are separated may acquire separate domiciles,
even though no judgment or decree of separation has been rendered provided the
requisite move and intent are present.
Section 7 Minor Children
The domicile of the custodial parent is the domicile of an
unmarried minor, and cannot be changed by the minor's own act. The domicile of
a child for whom a guardian has been appointed is not necessarily determined by
the domicile of the guardian. Rather, the same factors which establish an adult
individual's domicile, the domicile of the guardian and the domicile of the
parents will all be considered.
Section
8 Students
A student who moves to another state to attend college but
who does not intend to remain in that state after graduation has not changed
domicile. Moreover, a student who is being supported by a parent or parents
does not establish a domicile separate from the parent(s) simply by attending
school in another state regardless of whether the student takes such steps as
acquiring a driver's license or registering to vote in the state in which he or
she attends school.
Section
9 Armed Forces Personnel
(a) An
individual in military service retains as his or her domicile the state from
which he or she entered service until a change in domicile is affected.
Therefore, if an individual was a Vermont resident on the date he or she
entered military service, the individual is presumed to be a Vermont
domiciliary during his or her entire military career unless positive action is
taken to change his or her domicile to another state (see the Soldiers' and
Sailors' Civil Relief Act, 50 U.S.C. App. 574).
(b) To change domicile, the individual must
not only be present in the new location but must establish that the move was
made with the intention of remaining domiciled in the new location indefinitely
and not simply until the employer assigns the individual to a new base or
location. A person does not acquire a domicile by his or her presence in a
place under legal compulsion because ordinarily he or she has not signified an
intent to acquire a domicile.
(c)
The domicile of a civilian spouse or civil union partner of a member of the
military is established under general domicile rules. If the spouse or civil
union partner moves to a military base or location with the intent of staying
there only as long as the military member's assignment lasts, there has not
been a change in domicile and the spouse's or civil union partner's last
established domicile continues to be his or her domicile whether that was the
state from which the military spouse or civil union partner entered service or
some other state.
Section
10 Aliens & Persons Living in Foreign Countries
(a) Domicile is not dependent on citizenship.
An alien can retain his or her foreign nationality and citizenship if he or she
establishes a domicile in Vermont. For example, an immigrant who has
permanently established his or her home in Vermont is domiciled here regardless
of whether such individual has become a United States citizen.
(b) The presumption is that a person who
leaves this state to accept a job assignment in a foreign nation has not lost
his or her Vermont domicile. To effect a change of domicile, it must be clearly
shown that such individual intends to remain there permanently.
32 V.S.A. §
5811(11)
