January 21, 1982
Subject:
Taxation; Individual Income Tax; Domicil; Married Women.
Requested By:
B. W. Brown, Director Individual Income Tax Division North Carolina Department of Revenue
Question:
May a woman who is married to a North Carolina domiciliary but resides in a state other than North Carolina and intends to remain indefinitely in such other state be conclusively presumed to be domiciled in North Carolina within the meaning of G.S. 105-135(13)?
Conclusion:
No.
Under the ordinary common law rules of domicile, a person who is sui juris may establish his domicile at a place where he is physically present and intends to remain. However, acquisition of a domicile of choice was unavailable to a married woman at common law because she was deemed to acquire her husband’s domicile upon marriage by operation of law. The question of whether a married woman’s domicile for individual income tax purposes is that of her husband has never been addressed by the North Carolina courts. Our Supreme Court has, however, had occasion to consider the issue of a wife’s domicile in connection with jurisdiction over divorce actions and venue for purposes of administration of a decedent’s estate.
As early as 1837, our Supreme Court had begun to depart from a rigid application of the common law rule that a married woman’s domicile follows that of her husband. In Irby v. Wilson, 21 NC 568 (1837) plaintiffs, to whom the father of an intestate decedent had assigned his share in his son’s estate, alleged that the estate included certain property in which the decedent had acquired an interest by virtue of his marriage to one Mary H. Mary H. answered that prior to her marriage to decedent she had married one Alexander Jones, that Jones had been living at the time of her marriage to Irby, that the second marriage was null and void, that Irby acquired no interest in her property and that the assets in question were her sole and separate property. It further appeared that Jones and Mary H. had lived together as husband and wife in Tennessee, that she left Tennessee and began living with relatives in North Carolina, and that Jones later obtained a divorce in Tennessee. Plaintiffs contended the Gennessee divorce was valid because Mary H. was domiciled in that state and that its courts had personal jurisdiction over her. It was held, however, that the common law rule, upon which plaintiffs relied, ought not be allowed to defeat justice and that despite the fact that her husband had remained a domiciliary of Tennessee, Mary
H. had established her own domicile in North Carolina, thereby depriving the Tennessee courts of jurisdiction over her and invalidating the divorce.
The domicile of a married woman was also at issue In re Ellis, 187 NC 840 (1924). Plaintiff, the executor and sole beneficiary of his wife’s estate, filed a motion in Haywood County Superior Court for a change of venue to Cleveland County, where he resided, for trial on a caveat to his wife’s will. The court denied his motion, having found that the wife died in Haywood County, that she owned property there, that the subscribing witnesses lived there, that her will had been probated both there and in Cleveland County, and further, that she was not a resident of Cleveland County at the time of her death. On appeal the husband asserted that both he and his wife were domiciled in Cleveland County.
The Supreme Court, quoting Corpus Juris, observed that during cohabitation the domicile of the husband is at least prima facie the domicile of the wife. Indeed, the Court held that the wife was domiciled in the same county as her husband, but not without noting that "(t)he court below court below did not find facts sufficient to show that Ellen F. Ellis was domiciled in Haywood County." Id at 844. We may infer from the use of the term "prima facie" and the reference to the lower court’s findings of fact that the Supreme Court elected not to invoke an irrebuttable presumption and would have found the wife’s domicile to be different from her husband’s had the record supported such a conclusion. The Court’s departure from the common law rule is particularly interesting since it does not arise in the context of a divorce action, in which the unity of husband and wife is intentionally severed by the parties. There is no suggestion whatever in Ellis that the marital relationship was other than amicable. Indeed, the husband was his wife’s sole beneficiary.
Numerous cases on the issue of domicile of a married woman have been decided since Irby v. Wilson and In re Ellis. Typically, they recite the common law rule and, without further analysis, find the domicile of the wife to be that of her husband. These cases, however, should be understood in light of Irby and Ellis, which, upon careful reading, make it clear that a rigid application of the common law was never intended in North Carolina.
A flexible approach to this issue was adopted in Green v. Commissioner of Corporations and Taxation, 364 Mass. 389, 305 NE 2d 92, 82 ALR 3d 1268 (1973), one of the few cases decided to date on the question of a married woman’s domicile as it relates to her liability for state taxes. There a woman who had been domiciled in New Hampshire married a man domiciled in Massachusetts. The wife remained in New Hampshire for five months after the marriage in order to wind up her business. She moved to Massachusetts to live with her husband shortly after selling certain corporate stock at a substantial gain. The Commissioner sought to tax the gain on the theory that she had been domiciled in Massachusetts at the time of the sale by virtue of the marriage. The court noted that common law rule, upon which the Commissioner relied, was based on two pro-positions: (1) the marriage, and (2) the desirability of governing the interests of husband and wife by the same law. The first was found to have been rendered moot by the enactment of the married women’s property laws in the mid 1800’s, and the second, according to the Court, was so eroded as to have no continuing validity. Indeed, the Court found the law, as stated by the American Law Institute, Restatement 2d: Conflict of Laws, § 21 and comment d (1971), to be as follows: "A wife who lives apart from her husband can acquire a separate domicile of choice . . . even though her relations with him are wholly amicable." 82 ALR 3d at 1272. The court noted further that policy considerations do not support continued application of the common law rule. Taxation was said to be a practical matter concerned more with substance than with form and, therefore, not be governed by such artificial rules as the fictional unity of husband and wife. Though the constitutional argument was not discussed per se, the opinion suggests that the operation of the common law rule might well create an impermissible sex-based classification in that nonresidents who married Massachusetts domiciliaries might or might not be subject to that state’s income tax laws, depending on their sex.
The policy considerations which influenced the Massachusetts court have equal relevance in North Carlina. Indeed, they may apply here with even greater force since North Carolina, unlike Massachusetts, does not accord any particular status to married couples for income tax purposes in that it does not permit the filing of joint returns. The requirement that a husband and wife file separate returns, albeit on a combined form is consistent with making a separate determination as to all matters affecting their individual liability for North Carolina taxes, including domicile.
In view of the policy considerations militating against strict adherence to the common law rule and the demonstrated intention of the legislature to tax husbands and wives independently; we conclude that a woman married to a North Carolina domiciliary but residing elsewhere may not be conclusively presumed to be domiciled in this State.
Rufus L. Edmisten Attorney General
Marilyn R. Rich Assistant Attorney General