L Meaning of Domicile. The term "domicile" has a special legal definition that is not the same as residence.Your legal residence (actually called "domicile" in the tax law) changes whenever you physically pack up and move to a new state (or country). The state is your "domicile," the place you envision as your home and where you intend to return after any absences. Establishing domicile (i.e. , your permanent home) in a state will help ensure you will be taxed under that state's laws. If you lived inside or outside of California during the tax year, you may be a part-year resident. As a part-year resident, you pay tax on:.