What in the world is a domicile state? When Kathy and I started on the full-time adventure, we were unaware of the advantage of selecting a state for domicile purposes. We were in Florida and paid no state taxes and we thought that was enough. Not so! We paid seven percent sales tax on the motor home purchase. That was a sizable chunk of money we could have used for better purpose. We realized there were other possibilities when we were researching mail forwarding services. We went to the website of Alternative Resources http://www.alternativeresources.net/ and all the advantages of South Dakota residence were listed. At that point we purchased “Choosing Your RV Home Base” from Roundabout Publications at Camping World. Now it is available at Amazon.com and at www.rvbookstore.com . This book is a must have if you are just starting out full-timing.
Unfortunately, we can no longer recommend SD as a domicile state. Their insurance rates have more than doubled over the last 5 years. There is no portable(out of state) health insurance available, and you must return to SD to renew your driver’s license. Florida and Texas are the best bets for domicile states for full-timers.
In it we found state by state listings of: financial liability by state; federal taxes for full-timers; state retirement exemptions; tax advantages of each state; vehicle licensing registration specifics; and voting rules and requirements. We were able to compare states and wrote down the things that were important to us. At the end of this process, we chose South Dakota for no state income taxes, low vehicle insurance and registration, and very friendly probate laws. As above, this is no longer the case for both vehicle insurance and health insurance.
Pick a Domicile State
The RV lifestyle gives us the unique opportunity to choose any state to call “home” or Domicile State. For anyone considering the full-time RV lifestyle, a state to establish a home base can be quite important and there are several factors that must be considered. Among the most important issues for full-timers are taxes, insurance, and RV fees. Which states have the best income tax advantages? Which states offer the best rates on RV registration, including annual vehicle taxes? If you pick the wrong state to establish an official residence, it could result in your spending thousands of dollars a year that could be saved by establishing a home base elsewhere. And just how does a full-timer establish an official residency? Is it enough to simply rent a post office box? I don’t think so.
As soon as you arrive in your domicile state, you should establish a mailing address using a mail forwarding service. Then you surrender your current driver’s license and get 5them from your new state. Next, you should go to an insurance office or on-line site and get insurance for your car and motor home. Your next stop should be at the courthouse for vehicle registration for new license plates for both vehicles. Next you should register to vote in your new state. Because we travel so much, we do not vote in local elections and use absentee ballots for federal elections. It is best to evaluate the complete picture as it fits your particular lifestyle when selecting an RV home base state.
It is not a good idea to use one state for mail forwarding, another for a driver’s license, another as a legal address for tax filing, etc. States might think you are attempting to avoid paying their taxes or fees.