FULL TIME RVing: THE "HOME STATE" DILEMMA
We have had countless inquiries from readers asking the same question: Which state should I select for my "home state"? And what steps do I need to take to make that happen?
We've always responded with some form of this answer: "It depends on your particular needs and requirements -- and it must be done carefully to ensure you will get the results you are looking for." Actually, the answers have been a bit longer, asking a reader to consider carefully which of several considerations is more important to him, her or them -- including state income tax, state sales tax, inheritance taxes, vehicle registration costs, licensing, insurance, medical coverage and health care, etc.
If an RVer still has a "house" -- some sort of bona fide permanent address in a specific state, this issue does not arise. You already have a "home state". It's those RVer who dispose of their residence and spend all their time living in their RV who must come to grips with this issue. And the consequence of not doing so could be quite serious. The technical issue at stake here is a legal concept called "domicile". And while each state may have standards which are somewhat unique to it, in general it refers to that state where an RVer has most or all of his "contacts" (address, voting, drivers license, vehicle registration, bank accounts, insurance, etc), coupled with that RVers "intent" to make that state his or her principle residence.
While we're of the view that there is no "one size fits all" answer to the "which state is right for me?" question, we've concluded we can do better than provide the same general answers time and again. And while we still cannot analyze the circumstance of individual RVers, we can bring together here a resource of information which we think is both helpful and relevant in reaching a decision on this important issue. In doing so we disclaim any intent to provide guidance to any particular RVer.
One thing has become increasingly clear: Because state governments are desperate to fully collect all legitimate taxes to help address budget issues, RVers are now more exposed to aggressive tax collection efforts by state governments. Thus it's now more critical than ever that RVers do everything possible to document the legitimacy of their "home state".
We start with this list:
Domicile: One's Legal Residence This booklet is published by tthe Escapees RV Club, an organization dedicated to supporting all RVers. We have reviewed the document, and we think it is perhaps the most useful discussion of the issues relating to the choice of "home state". The topics it addresses are well covered. While the emphasis here is on the requirements for domicile in the State of Texas, the considerations discussed would be generally applicable to any jurisdiction. It's a great starting point for any RVer considering the "home state" question, and an excellent contribution by the Escapees RV Club.
State Income Tax Rates: Here is a list that you can quickly scan to see how each state taxes personal income. A few states have no state income tax. Others tax only certain types of income, such as dividends and interest. The amount and source of the income you're receiving can be a siginficant factor in your choice of home state.
State by State Sales Tax This table lets you know how much extra you'll be paying for goods purchased in each state. This might be important if you are planning to make a purchase of an expensive RV sometime in the future.
Some Experts Speak Out Although this item is in effect our "Class Notes" from a Life on Wheels Conference in 1997, some of the issues discussed here are extermely relevant to the issue of "home state".
As new information about the difficult issue of "home state" is brought to our attention, we shall add it here. Meantime, we hope these resources will be of help to the serious RVer who is contemplating the full time RVing lifestyle.