Establishing State Residency When Living Full Time in an RV
Many RVers Choose South Dakota as a State of Residency
Choosing a State of Residency
Choosing a state of residency is one of the important and most pressing decisions that you, as a prospective full-time RVer, will face. You have taken some big steps on the road to full-timing. Your house is on the market and the motorhome is in the driveway. You are whittling down your household goods and organizing things you will keep. Now, for the big decision: If you no longer live in a state, where will you have your legal residence?
Choosing a Legal Residence
You can remain a resident of your current state if you have relatives or friends who will let you use their address, or if you set up a mailbox. Your other option is to choose another state that is friendly to full-time RVers. If you do this, you must meet residency requirements for that state.
Tax Benefits in Some States
States with No State Income Tax:
- South Dakota
New Hampshire and Tennessee tax only interest and dividend income.
States with No State Sales Tax:
This is difficult to categorize since these states may have excise or local taxes that are not state taxes.
- New Hampshire
Why Choose A Different State?
People who have lived in a state for many years, perhaps even their whole lives, may identify with that state and wonder if there is a good reason to become a resident of a different state when they go on the road full-time. They soon discover that there are good financial reasons for changing residency. All states are not equal when it comes to the cost of registering and insuring your vehicle. Also, you can save thousands of dollars if you register a newly purchased vehicle in a state that has low or no sales tax.These costs are a big consideration when purchasing and registering a high dollar vehicle or an RV.
What is a Legal Address?
While the requirements to become a state resident sound simple, it usually means that you have to spend some time in the state to get things organized.
A legal address for residency must be a street address. Post Office boxes are not considered residential addresses, but there are mailing forwarding services in many states which will give you the required street address. This is usually fairly easy, and you do not need to set this up in person.
Things to Consider When Changing State Residency
Driver’s License. You must get a driver’s license from your state of residence. Some states will require you to take a driver’s test, others won’t. Either way, you need to do this in person as you will have to get a photograph taken and show proof of your identification.
Vehicle registration and insurance. Vehicles must be registered and insured in the state where you have your driver's license (your state of residency). This can usually be done by mail and, in the case of insurance, by phone, but there are several forms to fill out for the Department of Motor Vehicles. We found that our mail service, Dakota Post in Sioux Falls, South Dakota, has a staff member specializing in helping people through the process. There is a fee associated with this service, but it is well worth it as she walked us through each step and personally visited the DMV to take care of the paperwork.
Voting: Voter registration can sometimes be done when driver’s licenses are purchased. Voting in national elections can be done by absentee ballot. States have different requirements for registering for local elections.
Health Insurance: This should be purchased in your state of residency. If you are on Medicare, you should notify them of your new address after you establish residency in your new state. If you are on a health insurance plan with your employer or previous employer (retirees), you should check with them about your change of state residency to make sure you are still covered.
Taxes: There are seven states that don't have state income taxes: Alaska, Florida, Texas, Wyoming, Washington, South Dakota and Nevada. There are other states that give retirees special consideration at tax time. Some states do not tax Social Security income, some states do not tax pensions. It would be worthwhile to find out ahead of time how changing your state residency will affect your tax liability.
Will you return? Whichever state you choose, you need to consider how often you will be returning. Will you develop some community ties life social organizations, church, charity work? Will you get medical care, financial and legal services there? These are all things that will be looked at if there is a legal question of your residency.
Choosing an RV Friendly State
People have different reasons for becoming residents of various states, but there are three states that are very friendly towards full-time RVers and the most popular choices among full-time RVers. These states have no state income tax and they make it easy for RVers to establish and maintain residency. These states are:
Florida as Legal Residence for Full-Time RVers Because:
- It has no tax on income or investment income.
- It has many retirees and many choices of health insurance.
- It has mid-range vehicle insurance.
- It is convenient to RVers who plan to spend a lot of time on the east coast.
- There are some mail forwarding companies that will provide clients with a street address.
Texas as a Legal Residence for Full-Time RVers Because:
- It has no state income tax.
- Vehicle registration fees are low,however they do have an annual vehicle inspection. Texas does allow full-timers to postpone vehicle inspection until the next time they are back in the state after the inspection expires.
- Driver’s licenses can be renewed by mail.
- It’s easy to register to vote by mail.
South Dakota as a Legal Residence for Full-Time RVers Because:
- When purchasing a vehicle, there is only a 4% excise tax, but no other sales tax to pay.
- It has no state income tax.
- Vehicle registration fees are reasonable (rates are increasing in 2015).
- There is no state vehicle inspection required. This means that you do not have to go back each year to have your vehicles inspected.
- Vehicle insurance is much lower than many states. For example, insurance in SD is less than 50% of NC vehicle insurance.
- Driver’s licenses cost about $20 in 2011, but you must appear in person to renew every five years.
Other Considerations for Full-Time RVers
When choosing a new state for legal residence, you may also want to think about what your full-time life style will be. Every state offers discounts at their state parks to their residents.
Florida is a good choice if you will spend a lot of time on the east coast because Florida residents get a hefty discount on Florida state parks, and it's a great place to spend the winters.
Texas is a good choice If you intend to winter in the Rio Grande Valley or spend a lot of time in the Southwest. Texas has beautiful state parks and offers good discounts to residents. Many members of The Escapees Club are residents of Texas because The Escapees Club has a an excellent mail service based in Livingston, Texas and a very helpful staff.
South Dakota has the many financial benefits, and since you are only required to return to renew driver's licenses every five years, it might make the most sense for you. You do have to renew your driver's license in person, so you'll have to travel to South Dakota at least every five years if you choose it as your legal residence. One of the most popular mail services is located in Sioux Falls, SD. Dakota Post (formerly Alternative Resources) staff will also assist you when registering a vehicle or purchasing insurance long distance. There are other mail services, including Escapees, that are also helpful and reasonably priced.
Getting a Driver's License
Since 9/11, some states have put in place more stringent rules for proving citizenship and residency before they will issue a driver's license. Before you go to the DMV in your chosen state, do check to see what proof of ID you will need. In general, you should take along the following:
- Your old driver's license.
- Proof of identity like a birth certificate or U.S. passport.
- Your Social Security card or a W-4 or 1099 form that shows your social security number.
- South Dakata requires RVers to stay one night in a campground and bring a receipt showing names of anyone who wants to renew or get a new license.
When to Change State Residency
As you are planning to change your lifestyle from living in a "sticks and bricks" to living a life on wheels, you may be getting anxious about having all of your business affairs in order. Changing state residency can't be done until you actually sell your home and no longer own property in your home state, but there are some things you can do to get ready.
How to Prepare for Change of Residency
- Check into mail forwarding services in the state where you will become a resident and set up your new mailing address. Changing your mailing address by itself is not changing your residency.
- Change mailing addresses. When your moving date is a month to six weeks away, start changing your mailing address for memberships, subscriptions, financial institutions, etc. You can call your mail service at any time to have them send your mail to wherever is convenient for you.
- Plan a visit to your new home state. You have some time before you need to change over your drivers license, registrations and insurance, but that all needs to be changed at the same time. While you don't need to feel pressured, you should make a plan to visit your new "home" state within 2 or 3 months of going on the road.
- Once you are a legal resident of your new state, be sure to change your address with the Social Security Administration, Medicare and your health insurance companies.Don't forget your retirement plans and any life insurance companies, too.
On the Road
When it's time to pull out of your driveway for the last time, don't look back! We play Willie Nelson's song, "On the Road Again" each time we are off on a new adventure. You have places to go and things to see, so look ahead and enjoy the journey!
On the Road Again...
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This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Questions & Answers
Are you required to change banking institutions if you change your domicile when full-time RV'ing?
No, changing banking institutions is not a requirement, though you will have to change your address with your bank. When you do that, banks may require proof of your residency. They are not being difficult -- they are just complying with Federal regulations.Helpful 2
We live in Florida, and our son is going to high school this year. Could we use an address of the RV campground as his school address? Our house boundary school is not good, and we are looking for options besides having to sell/rent our property and rent/buy another property.
You'd have to check with your school district. My guess is that you would have to be living at the campground in order to use that as your address, but I don't know all the rules regulating school districts.Helpful 6
- Helpful 1
Can you become a resident of Texas and still have property in another state? We plan on becoming full time RV'ers but want to keep our home and rent it out.
I believe that there are people who do it, but you might want to consult an attorney to be sure of the legality of it. When you become a resident of another state, you usually have to prove that you live there.Helpful 8
We live in Missouri where annual Personal Property taxes are ridiculously high making RVs very expensive to register here. As a result, my wife and I need to establish a different more RV-friendy domicile. I see a lot of discussion on sales tax, income tax, and voting, but little on Personal Property taxes which can be more concerning than the other three issues. Do you have any suggestions on how to find locations with no or low annual Personal Property taxes?
According to the Motley Fool, there are 7 states that have no vehicle tax: Residents of Alabama, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maryland, North Dakota, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Washington, and Wisconsin pay nothing at all in-state vehicle property taxes.
You will note that this list includes Texas, Florida and South Dakota which have no state income tax and are popular with full-time RV'ers.Helpful 15
© 2011 Stephanie Henkel