Taxation of the Military
As a general rule, a vehicle's situs--where it is normally garaged, docked or parked--determines where a vehicle is taxed. Vehicles that are garaged, docked or parked in the County of Fairfax are subject to taxation in Fairfax County (Va. Code, Section 58.1-3511). There are exceptions to the situs rule:
- Domicile controls when situs cannot be determined;
- Domicile controls when the vehicle is owned by a student away at college;
- Domicile controls when the owner of a vehicle is domiciled in another state and pays a personal property tax on the same vehicle in the state of domicile.
Fort Belvoir - Taxation of Fairfax Military/Situs
- Fairfax County has general taxing authority with respect to property not belonging to the United States, but otherwise located at Fort Belvoir. Fairfax County CAN tax the personal property of servicemembers domiciled in Virginia who reside on Fort Belvoir military base in accordance with situs provisions of Va. Code, Section 58.1-3511.
For military personnel, taxation is controlled by the federal Servicemembers’ Civil Relief Act (SCRA) which states that:
- An active duty servicemember here on military orders who maintains domicile in another state is exempt from Fairfax County's personal property tax, regardless of whether a similar tax is paid within the state of domicile.
Military personnel who claim Virginia as their state of domicile are
subject to Fairfax County’s personal property tax based on the normal
situs rules. The car is taxable if:
- it is normally garaged, docked or parked in the County, or
- if garaged in another state but maintains a Fairfax County registration in the Virginia DMV.
For military spouses, a new law--the Military Spouses Residency Relief Act (Public Law No. 111-97)--now provides relief under certain circumstances. Prior to November 11, 2009, to be exempt from taxation, vehicles had to be registered solely in the name of the active duty military servicemember stationed here on military orders. Vehicles co-owned by a non-military spouse were subject to taxation. Beginning November 11, 2009, this is not necessarily true. For tax year 2009, qualifying spouses can be prorated out for the period from 11/11/2009 to 12/31/2009 upon request and certification. Beginning January 1, 2010, qualifying and certified applicants can be exempted from personal property taxation. Spouses continue to be taxable for car taxes prior to 11/11/2009.
Fairfax County's Application for Car Tax Exemption of Military Servicemember and/or Spouse - Use this form to change the exemption status on a vehicle already registered with Fairfax County and for new registrations.
For more information or assistance with military exemptions, email us at firstname.lastname@example.org.
PL 111-97 says that under certain circumstances, the spouse of
qualified military personnel can benefit from our local tax exemption.
Eligibility requires four factors. The spouse of an active duty
servicemember who maintains domicile in another state and is stationed
here on military orders can be exempt from personal property taxation
when the spouse:
- Currently resides in Virginia, but maintains domicile in another state;
- Resides in Fairfax solely in order to live with the qualifying servicemember;
- The active duty servicemember is here in compliance with military orders; and,
- The spouse and servicemember are both able to claim the same state of domicile. The law does not simply permit a non-military spouse to “pick or choose” a state of legal domicile in order to benefit from a tax exemption.
- Domicile can typically be thought of as the state where a servicemember has their permanent home and to which, whenever they are absent, they have the intention of returning. This is also known as Legal Residence or Home of Record (i.e., the state in which a person is recognized as having "citizenship or roots"). If they have never lived there, they generally cannot claim the state as their domicile. Generally, a person must reside in the new state at the time they form the intent to make it their permanent home.
- Both the qualifying military servicemember and the spouse must have the same domicile and provide evidence. Evidence of domicile includes things such as property ownership, voter registration, driver’s license, and income tax filings. In addition to the documentation listed above, military servicemembers must fill out a federal DD Form 2058, “State of Legal Residence Certificate.” A military servicemember’s LES will show their state of domicile. Military spouses are also issued a military ID card that identifies the card-holder as a spouse, but it does not identify the spouse’s domicile. Therefore, separate evidence of domicile will be required for military spouses before an exemption can be granted. Under Virginia law the burden of proof is on the one claiming an exemption.
As noted by the Federation of Tax Administrators:
- The spouse does not “inherit” the domicile of the servicemember upon marriage.
- The spouse cannot simply “adopt” the domicile of their choice.
- The spouse must be able to document when and how they established domicile.
- At a minimum, the spouse must have lived in a state before claiming it as a domicile. A spouse who has never lived in State X cannot simply claim it as their domicile for tax exemption purposes.
Everyday scenarios may cause the spouse to lose his or her tax
exemption under PL 111-97. These scenarios include:
- Servicemember leaves the service
Voluntary physical separation due to duty changes--i.e., orders
move the servicemember to a location outside the state where the
spouse is allowed to join the servicemember, but chooses not to do
so. (This DOES NOT include servicemember’s deployment to a war zone
or other location where the spouse is not allowed to follow. The
military treats this as a “travel” or “TDY” situation; the
servicemember’s orders do not change).
- Spouse commits an action that clearly establishes the state of residence as the state of domicile. Such actions would include filing a local court action, such as a claim for divorce, accepting in-state tuition, voting locally, and, possibly, filing Virginia income taxes.
- Leased vehicles are not eligible for military exemption. This is true for both the military member and the spouse.
If a servicemember assigned to Pensacola, Florida, marries, and the spouse lives in and establishes domicile in Florida, then both may retain Florida domicile when they are later stationed under military orders in Fairfax, Virginia. Neither would be subject to our personal property tax while here on military orders.
Likewise, if the couple met and married in Virginia, the military Floridian would be exempt from our personal property tax, but the Virginia spouse would not be able to claim an exemption under PL 111-97 because the physical presence and intent tests for domicile have not been met.
A military servicemember with a Florida domicile is stationed in Texas. Servicemember marries spouse in Texas. Spouse did not live in Florida and previously claimed Texas as domicile. Both move to Fairfax, Virginia on new military orders of the servicemember. Spouse cannot now claim Florida as being their joint domicile. The Military Spouse’s Residency Act does not allow the Spouse to simply pick a state of domicile for tax exemption purposes. In this example, any vehicles owned by or co-owned with the Spouse would be subject to the Fairfax County personal property tax.