Full-Time RV: Choosing a Domicile
DISCLAIMER: THIS IS NOT LEGAL ADVICE. WE ARE SIMPLY SHARING SOME OF OUR EXPERIENCES IN SELECTING OUR NEW DOMICILE. DO YOUR OWN RESEARCH AND CONSULT WITH TAX AND LEGAL PROFESSIONALS.
When Kasie and I decided to sell our home in Missouri and live in our RV full-time, one of the first things we had to decide is what state would be our new domicile. Most people chose either South Dakota, Texas, or Florida. But why? And what should we do?
In the video above, I try to explain our thought process. Again, this is what WE decided to do. YOU might have different circumstances, needs, or or considerations such that what WE did may not work for you. Again, please consult with a tax or legal professional as needed!
What is the Difference between Residency and Domicile?
“Residency” and “Domicile” are terms that are often used interchangeably by RVers but the meaning of each term is indeed very different.
Residence is just about a physical location. A person’s residence is the place where a person actually lives. A person can have numerous residences (e.g., houses in different states). Intent does not matter. For example, if a person goes to college in Missouri, but intends to return to Kansas after graduation, then the person may reside in Missouri, but the person’s domicile is still Kansas.
The statutes and court cases in each state may describe the concept of domicile a little differently, but the basic idea is the same. “A domicile is that place where a person has his true, fixed and permanent home and principal establishment to which, whenever [the person] is absent, [the person] has the intention of returning. See, e.g., Paulson v. Missouri, 91 S.W.2d 63, 66 (Mo.App. W.D. 1998) (emphasis added). In general, there are two elements to domicile: location and intent! A person can have only ONE domicile.
Why Does Domicile Matter?
A person’s domicile is important in determining where someone can vote, where to get a driver’s license, where taxes are paid, how health insurance is calculated (and what options there are), where a vehicle can be registered, how assets are distributed upon death, where someone can be sued, and many other things.
Many full-time RVers want a state with no income tax as their domicile. As of 2022, nine states do have any state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Other things many RVers consider are (1) sales tax rates (if purchasing a new RV), (2) annual vehicle registration fees, if any, (3) annual vehicle inspection requirements, if any, (4) vehicle insurance rates, (5) health insurance options, and (6) driver’s licensing requirements for larger rigs. For example, Texas requires a special Class B license for RVs weighing over 26,000 pounds and annual inspections (at least until 2025), while South Dakota and Florida do not. We investigated some of those issues when choosing our domicile, but those were not the deciding factors with respect to the place we wanted to call home. The most important thing to us was finding a place that we actually wanted to live.
How to Determine Domicile
The government looks at various factors to determine a person’s domicile. For example, the factors may include:
The person’s physical address;
Where the person gets mail;
Where the person has a driver’s license;
Where the person pays state income tax;
Where the person votes;
The location of the person’s property;
Length of residence;
What the person’s estate planning documents say; and
Location of the person’s doctor, dentist, accountant, financial planner, lawyer, or other professionals.
Of some note, many states have a continuing domicile presumption. That is, a person continues to be domiciled in a state until that person establishes a domicile in another state. One case that RVers should be aware of is Sanchez v. Comm’r of Revenue, 770 N.W.2d 523, 527 (Minn. 2009). In that case, a couple who was planning to RV full-time had a contract pending on their Minnesota home, and the sale was set to close in June 2004. In May 2004, they traveled to South Dakota for about 10 days and tried to establish a domicile there. According to the court:
Using their South Dakota address, the Sanchezes applied for and received South Dakota drivers' licenses, opened a checking account, obtained credit cards, registered their vehicles, and registered to vote. They also notified their insurance providers of their new address. The Sanchezes did not rent or purchase property in South Dakota, as they planned to travel and wanted to avoid the expenses and obligations of home ownership. Their affidavit states that they intended to return to South Dakota to rent or buy a home.
The couple returned to Minnesota and closed on the home. “For the remainder of 2004, the Sanchezes traveled in their motor home to 13 states, the District of Columbia, and Canada, and did not return to either Minnesota or South Dakota.” Yet, the tax commissioner found that there was no evidence that their visits to South Dakota during 2004 were anything more than brief, temporary stays for the purpose of establishing a mailing address. On appeal, the Minnesota Supreme Court agreed, noting that all of the actions taken by the couple that allegedly demonstrated their intent to domicile in South Dakota took place before they had extinguished their domicile in Minnesota In essence, the couple failed to couple their physical presence in South Dakota with their intent to make South Dakota their new home. Accordingly, the court found that the couple continued to be domiciled in Minnesota, even though the couple never went back there. The couple was on the hook for Minnesota taxes (plus penalties) for the entirety of 2004.
Okay. One more time….It is advisable to consult with tax professionals and/or attorneys on some of these complex issues.
Why Did We Choose South Dakota?
When we decided to live full-time in our RV, we sold our home in Missouri and did not intend to live there again after we were done traveling. We had to figure out where to call home.
We looked at many of the states that we had visited over the past few years. Vacation destinations like Florida and Arizona are nice in the winter, but they just didn’t feel right to us. We are both Midwesterners and that is what feels most like home to us so we narrowed our list to the states in the middle of the country. While Lana has family in Kansas and Kasie has family in Oklahoma, neither of us could see ourselves actually living in either of those states when we were done RVing. Been there, done that…so to speak. Colorado is way too expensive. Texas seems to have an big attitude (too big, if you get my drift). I liked Iowa and it was in the running. However, in the end, we were really drawn to the beauty of South Dakota, its Midwest culture, central location, and proximity to family. We fell in love with South Dakota (especially the western part) when we had visited it, and could really see ourselves coming back to the area time and time again. We also liked the size of the Rapid City area and looked at the price of homes, trying to gauge what they might be in 2-5 years when we think we might be done full-time RVing.
Here’s a little song I wrote about South Dakota and why we ended up choosing this beautiful state as our home base!
Getting Mail as a Full-Time RVer
We also thought about the practicalities getting mail. Most mail forwarding companies use South Dakota, Florida, or Texas as their address. These companies include:
Americas Mailbox in Box Elder South Dakota
After choosing South Dakota and comparing mail services, we opted to use Americas Mailbox so that our physical address would be located just outside of Rapid City. That part of the state with the Black Hills and Mickelson Trail is our favorite part. It just seemed like all of the stars were aligning with that part of South Dakota.
Banking as a Full-Time RVer
The Patriot Act requires banks to get an address for its customers. The regulations state that this “address” must be:
"(i) For an individual, a residential or business street address;
(ii) For an individual who does not have a residential or business street address, an Army Post Office (APO) or Fleet Post Office (FPO) box number, or the residential or business street address of next of kin or of another contact individual...."
See https://www.law.cornell.edu/cfr/text/31/1020.220 (31 CFR § 1020.220 - Customer identification program requirements for banks). Importantly, a PMB won’t work.
For us, the regulations have not been an issue as a practical matter. We've just used the address of a family member for the required address. We do all of our banking online too. To the extent that we would need something mailed, our banks also ask for a separate "mailing address," and the PMB is acceptable for that.
South Dakota Driver’s License
Commercial or Non-Commercial Driver’s License in South Dakota?
Our RV -- a 2022 Entegra Accolade XL -- weighs about 31,000 lbs. We call her BIG LADY. As noted above, many states require their residents to obtain a special driver’s license for vehicles weighing over 26,000 pounds. For example, an RVer domiciled in Texas with a big rig would likely have to obtain a non-CDL Class B license to drive a rig like ours.
One of the first things that we investigated was whether South Dakota required a special license. Fortunately, a vehicle driven for “personal use” or “recreational use” and “not operated for private business use” does not require a special license. SDCL 32-9-3(10)/(11).
Obtaining Our South Dakota Drivers’ License
After arriving in South Dakota, one of the first things we did was get our drivers’ licenses at the Pennington County DMV. Here’s the process we used:
DMV in Rapid City, South Dakota
Made an on-line appointment at the Pennington County Driver Exam Station (booking online likely saved us about 30-40 minutes)
Surrendered previous Missouri driver’s license
Took and passed a vision screening test
Provided proof of lawful status. This can be a certified U.S. birth certificate (state certified only), a valid, non-expired U.S. Passport/Passport Card, a Certificate of Citizenship/Naturalization, a Permanent Resident Card, an Employment Authorization Card, or a Foreign Passport with a U.S. Visa/I-94.
Provided a second type of ID. This can be a REAL-ID compliant drivers license (with the gold star in the upper corner), Social Security Card (showing the full social security number), a W-2 (showing your full social security number), a 1099 (showing the full social security number), or a pay stub (showing the full social security number).
Completed a Residency Affidavit that was provided to us by the DMV.
Provided two documents (not more than one year old) proving our full names and residential/physical address at America’s Mailbox. We used (1) a receipt from America’s Mailbox showing that we had stayed in South Dakota for at least one night and (2) a document from America’s Mailbox showing our PMB number.
We filled out everything while we were at the DMV. The entire process took less than 20 minutes and cost about $30.
South Dakota License Plates
Obtaining our license plates at the Pennington County Treasurer’s Office took a little longer and was A LOT more expensive. We had to title two vehicles: (1) our 2019 Jeep Cherokee, which had been registered in Missouri and (2) our 2022 Entegra Accolade XL, which we had just purchased in Tennessee a few weeks ago.
What is the Vehicle Sales Tax in South Dakota?
How much is the South Dakota Vehicle Sales Tax?
South Dakota imposes a 4% “excise tax” on the purchase price of new vehicles. SDCL 32-5B-1. Pennington County doesn’t impose an additional sales or excise tax on top of that. That overall 4% tax rate was welcome news to us — given that we had been accustomed to 8+% back in Missouri!
How Does a Trade-In Affect the South Dakota Vehicle Sales Tax?
When calculating the excise tax on a new vehicle purchase, the purchase price does not include a credit or trade-in value made by a licensed motor vehicle dealer. SDCL 32-5B-4. In contrast, the purchase price definition does not include a deduction for private party sales. So what does that mean? As an example, if someone purchasing a new RV traded their old RV to the dealer for $70,000, they would save would save $2800 when paying the excise tax. That person would need to sell to a private party for at least $72,800 to beat the dealership price. Some states, like Missouri, allow a credit for both dealership trade-ins and private party sales so South Dakota is not as favorable as some states on this issue.
How Do Previously Paid Sales Taxes Affect the South Dakota Vehicle Sales Tax?
With respect to the 4% excise tax, SDCL 32-5B-11 also gives a credit for taxes paid to other states. Thus, because we had already paid a sales tax in Missouri on our Jeep Cherokee, the registration fees in South Dakota were relatively inexpensive for that vehicle.
After selecting South Dakota as our domicile, we did some back-of-the napkin calculations. We estimated that our fees would be around $8000, with the bulk of that attributable to the purchase of the new RV.
Warning: South Dakota will credit to sales taxes paid in another state on a vehicle purchase only if there if full reciprocity. According to the Pennington County webiste, full feciprocity does not apply to those coming from Al, AK, CO, OR, SC, NH, NC, OK, NM or MT. What does that mean? Some friends of ours wanted to move from South Carolina (sales tax on vehicles capped at $500) to South Dakota. In such a case, South Dakota was going to charge them nearly $8000 in sales tax (the difference between 4% and $500) to have their RV registered in South Dakota.
How to Pay the Vehicle Excise Tax in South Dakota
The Treasurer’s Office imposes a hefty surcharge on payments made by credit card or debit card so we were planning to pay by check. However, the website says: “No out-of-state checks or counter checks accepted. Send cashier's check or money order for vehicles.” We verified with America’s mailbox that the Pennington County would not take an out-of-state check, and they advised us to go get a money order. Because the maximum amount for each money order is $1000, America’s Mailbox also suggested that we purchase multiple money orders.
I’ve never gotten a money order before. We went to the local Walmart, only to find out that they had a $3000/day limit. Moreover, the person working there said we would only get $3000 combined since we were together. To get around this, we went to another Walmart, where one of us purchased another $4000 in money orders. Apparently, the store policies on money orders vary by who is working. All of that took some time and patience.
Treasurer’s Office in Rapid City. We did NOT need to fill out any of these forms. Instead, the clerk took the information verbally.
After getting our money orders, we arrived at the Treasurer’s Office around 9:15 am, and there was already quite a line. We knew that would be the case because there’s a live feed here. As we were standing in line, we filled out the paperwork for our (1) title and registration and (2) personalized plates. DON’T BOTHER DOING THIS BEFOREHAND. The clerk took all of our information verbally and entered it into the computer system and did not even look at our paperwork. The clerk then printed out all of the necessary forms and had us execute those.
As we were paying, the clerk had to check with another person on how to handle money orders. That prompted us to ask whether the County would take and out-of-state check. The clerk replied that that policy only applies to applications received by mail. If someone shows up in person, an out-of-state check is acceptable. Apparently, out-of-state check are just not accepted by mail or phone (I’m not sure how one would pay by check on the phone). Bottom line: we did not need the money orders and could have paid in-person by check.
All in all, the title and registration process went smoothly. We were done by 10:45 am so we completed the whole process of getting our driver’s licenses and tags in a single morning. And, I learned how to get a money order :).
South Dakota Registation Fees for our Super C Entegra Accolade
Here’s a breakdown of what it cost to register our 2022 Entegra Accolade when it wa new in 2022 and then renew the registration in 2023. The cost excludes any vehicle excise taxes.
Voting in South Dakota
I think the biggest drawback to the whole domicile issue and living full-time in our RV is going to be voting. Absentee ballots are available 46 days prior to an election. SDCL 12-19.1.2. Because we will be on the road for many elections taking place in South Dakota, we will have to request an absentee ballot by mail (not by email or fax), have the ballot sent to our address near Rapid City, pay to have American’s Mailbox mail the ballot to us, and then mail the ballot back to Pennington County before Election Day. I’m one of those people who vote in every little election so that is quite a cumbersome and expensive process.
2023 Update on Voting in South Dakota
In 2023, South Dakota amended the voter registration rquirements (SB 139). Among other things, Section 12-1-4 now states:
“For the purposes of this title, the term, residence, means the place in which a person is domiciled as shown by an actual fixed permanent dwelling, establishment, or any other abode to which the person returns after a period of absence. A person who leaves the residence and goes into another county of this state or another state or territory for a temporary purpose has not changed residence. A person is considered to have gained residence in any county or municipality of this state in which the person actually lives, if the person has no present intention of leaving. A person retains residence in this state until another residence has been gained. If a person moves from this state to another state or territory with the intention of making it the person's permanent home, the person loses residence in this state.”
Further, the statute was amended to add a new Section 12-4-1, which states that as part of the voter registration form, an applicant must attest that he/she “has maintained residence in South Dakota for at least thirty days prior to submitting the registration form.”
We are awaiting further guidance in terms of how this will affect our ability to vote in our home state.
Here are some articles discussing the issue:
2024 Update on Voting in South Dakota
The 2024 legislative session is seeing further attempts to restrict voting by RVers. SB 17 as introduced requires a person to maintain a residence “for at least thirty days in the three hundred and sixty-five days immediately prior” to submitting the registration form. This proposed law will also be retroactive to any person who registers to vote on or after July 1, 2023. The bill was then amended in the Senate to remove the 365-day and 30-day requirement and to liberalize the residency definition:
12-1-4. For the purposes of this title, the term, residence, means the place in which a person is domiciled as shown by an actual fixed permanent dwelling, establishment, or any other abode has fixed the person's habitation and to which the person returns after a period of absence.
The House tabled this version of the bill so there is still a 30-day residency requirement.
Legal Challenges to the New South Dakota Voting Laws
Challenges to the South Dakota Voting Law
For the June 2024 primary election, Jessica Pollema filed challenges two precincts in Minnehaha County (Sioux Falls): (1) precinct 5-16, which has a polling place at the downtown Sioux Falls public library, and (2) precinct 4-16, which uses Word of Life Pentecostal Church as its polling place. Pollema, an “election integrity” activist, challenged the votes of hundreds of registered voters in those precincts with addresses associated with mail forwarding companies like Dakota Post and Your Best Address. Although the challenge was rejected by Precinct Board 5-16, Precinct Board 4-16 upheld it — which ment that 132 ballots were not counted. The ACLU and the League of Women Voters sent this letter to the South Dakota Secretary of State and the local Recount Board, indicating that such actions were unconstitutional. Ultimately, the Recount Board decided to count all of the challenged ballots
Facial Challenges to the South Dakota Voting Law
So far, no one has come forward to challenge the current South Dakota voting requirement law. However, challenges are currently being made to similar durational residency requirements in other states. See Washington State Alliance for Retired Americans v. Hobbs, Case No. 3:23-cv-06014, U.S. District Court, Western District of Washington; North Carolina State Alliance for Retired Americans v. Hirsh, Case No. 1:23-cv-837, U.S. District Court, Middle District of North Carolina. The complaints in these cases state:
1. The Voting Rights Act (“VRA”) prohibits states from preventing otherwise eligible voters from voting for president and vice president based on how long they have resided in the state before election day. And the United States Constitution prohibits such requirements in all elections.
2. Section 202 of the VRA is explicit: “No citizen of the United States who is otherwise qualified to vote in any election for President and Vice President shall be denied the right to vote . . . in such election because of the failure of such citizen to comply with any durational residency requirement of such State or political subdivision.” 52 U.S.C. § 10502(c) (emphasis added).
3. Likewise—regarding all elections—the United States Supreme Court has held that “[d]urational residence requirements” that “completely bar from voting all residents not meeting the fixed durational standards” deprive voters of the fundamental right to vote and “impinge[] on the exercise of a second fundamental personal right, the right to travel.” Dunn v. Blumstein, 405 U.S. 330, 336, 338 (1972).
4. To be sure, both the VRA and the U.S. Constitution allow states to impose short, pre-election registration requirements, and to limit registration and voting to bona fide residents. Specifically, the VRA authorizes registration deadlines up to 30 days before a presidential election, 52 U.S.C. § 10502(d), and the U.S. Constitution allows pre-election registration deadlines where “necessary to permit preparation of accurate voter lists,” Marston v. Lewis, 410 U.S. 679, 680–81 (1973).
5. But a registration requirement is different from a pre-election durational residency requirement, which the VRA absolutely prohibits in presidential elections, 52 U.S.C. § 10502(c), and which impinges on fundamental rights to vote and travel, with no adequate justification, in all elections, Dunn, 405 U.S. at 343–60. Both the VRA and the U.S. Constitution protect voters from being denied the fundamental right to vote simply because they moved to a new address shortly before election day, if they otherwise comply with the state’s registration deadlines and other requirements.
(emphasis in original). Similar arguments could be made in South Dakota. We are keeping tabs on these cases as well.