Identifying your domicile|
Commentary by Capt. Carman A. Leone
30th Space Wing Legal Office
1/30/2012 - VANDENBERG AIR FORCE BASE, Calif. -- Domicile is a term of art that has a very specific meaning. Different from "home of record" or "residence," your domicile is the state in which you reside now or have resided in the past, and the place where you intend to remain or return to.
Everyone has a domicile, but identifying it can be difficult at times. Your domicile is important for a variety of legal matters, such as, for example, creating a will; your state of domicile will dictate which state's laws will control the probate of your will. For civilians, a domicile is usually the place where someone maintains a primary residence. Even if a person decides she does not want to remain in the state in which she currently resides, the state will nonetheless typically become the de facto domicile of the individual after she spends 183 days in that state.
Military members, however, have special rules. Congress recognized that military members move very frequently, often from one state to another, with little to no say in where they serve. It recognized that it would be fundamentally unfair if military members were forced to claim a domicile in every state they were ordered to live in. To relieve this burden, Congress promulgated the Servicemember Civil Relief Act (SCRA), which states "a servicemember shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the person, personal property, or income of the servicemember by reason of being absent or present in any tax jurisdiction of the United States in compliance with military orders."
This means that if you are originally from New Jersey, for example, you will not automatically lose New Jersey as your domicile, nor will you acquire a California domicile simply for moving to California because of your PCS orders to Vandenberg AFB. If, however, you decide you want to declare California as your domicile after moving to the state, you are free to do so. The choice is up to you.
Until recently, this domicile benefit only extended to military members. In 2009, however, Congress amended SCRA with the Military Spouse Residency Relief Act (MSRRA), which extended this same benefit to civilian spouses of military members. After all, often where ever the servicemember moves, so will follow the family. Now, under MSRRA, a spouse will not lose or acquire a domicile simply for moving to another state "solely to be with the sevicemember in compliance with the servicemember's military orders..."
There is one catch, though. Under MSRRA, in order for a spouse to take advantage of the domicile benefit, the servicemember and the spouse must have the same domicile before moving to the new state to serve in accordance with military orders. To illustrate this point, suppose a single New Jersey servicemember visits Minnesota while on leave, meets a Minnesota civilian and marries her. If the Minnesotan moves out to live in California shortly after the marriage to live with her New Jersey servicemember spouse serving at Vandenberg AFB, she will be unable to take advantage of MSRRA because the military member and the nonmilitary spouse were domiciled in two different states at the time they each moved to California. Thus, regardless of whether the Minnesotan wants to become a domicilary of California, the she will acquire a California domicile after living there for 183 days.
To further complicate matters, some states may challenge your declared domicile, regardless of your status as servicemember or spouse. Often, career Airmen who have been serving for over a decade will choose to become a domiciliary of a state the member once served in because of a tax benefit it offers to the member. A servicemember, however, cannot simply choose a domicile because of a state's favorable tax treatment.
A servicemember who has been shuffled around for a decade will have ties to many different states. To identify your correct domicile, it's important to look at the state to which state you have predominate ties or contacts. For example, where do you hold a driver's license? Where do you hold a professional license(s)? Where do you own real estate? What state governs the probate of your will? Which state did you get married in? Which state did you get divorced in? Where are you registered to vote? Where do you want to live when you separate from the military? An analysis of the answers to many of these questions will point to your domicile.
Notwithstanding your choice, states may challenge your declared domicile if you say you are a domiciliary of one state but treat a different state as your domicile. An example will help illustrate this point. Let's say our friend, the servicemember who declares to be domiciled in New Jersey, has not lived in New Jersey for 15 years. He is now serving at Vandenberg AFB. He has a driver's license in California, his car is registered in California, he owns a house in California, recently got divorced in California, and he holds a professional license to practice medicine in California. The only connection to New Jersey is his service there for a few years, 15 years ago. Although the servicemember may want to claim New Jersey as his domicile for tax purposes, California may challenge him. The California Franchise Tax Board may fight the servicemember's declared intention of identifying New Jersey as his domicile, and declare him a California domiciliary by virtue of all the state privileges which the service member availed himself of while living in California. Unless the servicemember can provide a good reason to the state for why he should not be taxed by California, he will be.
Analyzing and applying these rules can get quite tricky. While applying MSRRA and SCRA may be frustrating at times, know that you not have to wade through this legal murk alone. You may always contact the 30th Space Wing Legal Office, at 605-6200, for legal assistance.