Where to Domicile if Full Time RV'ing?


us-map.gifThis is an important question for RV full timers and requires some research. There are several factors to consider:

  • State income tax
  • Personal property tax
  • New vehicle sales tax
  • Insurance rates
  • Vehicle registration requirements
  • Driver's license requirements
  • Vehicle inspection requirements
  • Property tax (if you are going to own real property in the state you call home)
  • Mail service membership fee
  • Other

When Pam and I started our RV adventures full time, we did so after selling our home in Leesburg, VA. We changed all of our mail to a UPS store box in Leesburg. We registered our new RV (the Providence) and tow car (Saturn View) to our new Leesburg address. Virginia state vehicle sales tax was 3%, one of the lowest in the nation. UPS for mail delivery was charging over $200/year for our mail box plus UPS fees for forwarding. UPS is not inexpensive!

At the end of the first year traveling around North America, we received a bill from Virginia for over $6,000 personal property tax on our two new vehicles. Ouch!

Next, based on a recommendation from full timing friends and Escapees, we chose to "domicile" in Texas. Escapees in Livingston, TX here we come. Why Texas?

  • No state income tax
  • No personal property tax
  • Reasonable vehicle registration fees
  • Low Escapees mail service membership fee and options on mail delivery services

All good reasons, but on the downside ...

  • Higher vehicle insurance rates in Texas because of the high uninsured motorist population
  • Vehicle over 26,000 lbs requires a commercial driver's license (the Providence)
  • Annual vehicle inspection requirement

After a year and a half and a bit more research, we found many full time RV'ers were domiciling in South Dakota. Why?

  • No state income tax
  • No personal property tax
  • Reasonable vehicle registration fees (a bit lower than Texas)
  • Easy vehicle registration
  • No special driver's license requirement (simple if you have a current one)
  • No vehicle inspection requirement
  • Quality mail service at reasonable rates
  • AND, one of the lowest vehicle insurance rates in the US!

Americas Mailbox in Rapid City, SD here we come! The downside? The administrative pain to change our address one more time. But, worth it for the simplicity and significant savings on vehicle insurance.

So, research is a good thing and should lead you to a good decision.

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I share this with any of your readers who may be California residents at the time they choose to go full time RVing.

We had been residents of California (CA) for over 25 years. So, taking steps to become a resident or to domicile in a particular state did not necessary mean the CA Franchise Tax Board (FTB) agrees with the change. They have several criteria they publish at http://www.ftb.ca.gov/aboutFTB/manuals/audit/rstm/2000.pdf For example, just read the "Presumption of Residency" section. This means without taking the appropriate steps, one can still be liable to the FTB and other CA agencies long after leaving the state for taxes and fees - even if paying taxes and fees in the new state.

For the reasons sited in the link just provided and confirmed by our tax accountant, we had to chose a state where we would actually be spending time each year and could prove, in the event of an audit, that it is in fact our new home (since, as full-timers, we won't have a permanent address, utility bills, etc.) We have to take specific steps in that new state (actually visit it, have receipts to prove we were there, register to vote, spend more time there than in California each year for the next seven years, etc).

We had a great tax accountant in CA that walked us through the process and helped us out.

In summary, I would suggest to those looking for a domicile state to consider the state you are leaving and any tax consequences resulting from that state's own determination of what makes a resident.

Hi Charlene,
Good info for Californians.

Texas and South Dakota "domicile" laws are very easy. Simply get an address (mail service like I described above) and register your vehicles. The only time to re-visit the state is to renew driver licenses.

To register vehicles in South Dakota, we also had to show a receipt from the RV Park to show that we were in South Dakota for at least one day and testify that we are full-time RV'ers. I also think we had to attest we do not own property in another state. This becomes a problem with full-time domiciling when owning property in another state. The rules get a little fuzzy state by state.

Good advice you give for consulting with a tax professional.

Many California RV'ers are purchasing and registering the asset in a Montana LLC to avoid taxes. California and many other states are going after these situations because of the obvious attempt to avoid taxes.

Hard for me to understand how California has any jurisdiction over you if you do not own property, do not have California income or anything else to domicile somewhere else ... what can they go after?

Did you consider FL for domicile?

No I didn't. We spend more time in the Southwest and Northwest so Texas and South Dakota were more convenient to us. We spend our summers in the Northwest so Rapid City, SD is in our geographic preference.

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