Choosing Your RV Home Base
What is an RV Domicile?For those new to full time RV living, the concept of choosing an RV home state might seem odd.
After all, isn't the point of RV life styles to be free? To live a transient life, never calling any one place home?
Yes, it is.
And that's where the difference between a domicile and residence come into place.
Your RV domicile is where you get your mail, pay your taxes and have on your drivers license, registration, and automobile insurance. You do not need to physically reside there, thus, it is not a residence.
Why is an RV domicile important? Declaring an RV home base is extremely important. If you have your address in one state, your RV registered in another, your automobile insurance in a third state, and your driver's license in a fourth state, then you are out of compliance with all states and could face serious fines. In addition, each of the states may claim that you owe state income tax to them, since you may be considered a resident of each.
Some full time RVers already have a domicile. If you own a stick home that you will be keeping or renting out while you are on your RV travel with kids adventure, the state your home is in is your RV domicile. You most likely do not have the ability to change this. If you do not own a home, however, pick the state that fits your interests the best.
Once you have chosen a domicile, you will need to obtain an address in the state. You can do this through a friend or family member, a UPS Store/Mail Boxes Etc account or something similar, or through an RV mail forwarding service.
You will then need to transfer all of your records, your licenses, insurance, and registrations to the new state. Annually, if required, you will need to pay income taxes to this state. And you will need to follow the homeschooling laws and regulations of this one state, no matter which state you happen to be traveling through.
Factors to Consider When Choosing an RV DomicileSo what factors should you consider when choosing your RV home base? Each family will be different when it comes to making this all important choice. There is no one perfect state. There is give and take in every state, just prioritize your needs to make your choice.
State Income Tax
Most states have state income tax. A handful of states do not. This usually plays a big factor into what state to call home. The following states do not tax individuals on income: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
Every state has different homeschooling laws and regulations. Some states are quite easy to homeschool in, some states are horribly restrictive, while most states fall somewhere in between. The following states have very easy homeschool regulations: Alaska, Connecticut, Idaho, Illinois, Indiana, Michigan, Missouri, New Jersey, Oklahoma, and Texas.
State Sales Tax
When it comes to purchasing or registering a new vehicle or RV, state sales tax needs to be considered. Most states will charge residents (or those who choose to call their state their RV domicile) sales tax on a new purchase even if purchased in a different state. The following states have no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Note: though Alaska does not have state sales tax, some counties or boroughs do.
Driver Licensing and Registration
Registration fees vary greatly state by state. Some have a low, flat annual fee, while other states, such as Montana, charge several hundred dollars annually in registration fees (on a newer vehicle). Then there is the procedure for renewing your license. In Alaska, for instance, you must renew in person. This may pose a problem if you had no plans to return to the state in a given year.
State Auto Insurance Requirements
Auto insurance premiums vary by state. Your auto insurance rates will be affected by the state you call your RV domicile.
You should be able to vote absentee without a problem, assuming you are registered to vote in your RV domicile state. But state politics are important to consider when choosing a domicile too. Are you politically involved? Do you want to call a red state or a blue state home? Would you prefer to vote in a state that is undecided, where you are certain that your individual vote counts, or does this matter to you at all?
Some full time RVers choose to spend a season in their domicile state. If this is you, weather may play a big role in your decision on what state to call your RV home base. The nice thing about RV travel with kids, however, is the ability to go with the good weather!
A Word on TaxesWe've talked about how important finding a good income tax state can be when it comes time to file your taxes. But there are a few more things to realize about taxes nationwide. The following is for informational purposes only: please consult your tax advisor for more information.
If You Own Your Business...
If you are traveling in your RV and you are self employed, your travel expenses are only deductible if you own a stick home. If you do not, you are considered a transient and may NOT claim these expenses legally.
If You Workcamp...
If you trade temporary work for a free campsite, or if you volunteer somewhere and get a free campsite in return, this is considered barter and must be claimed on your income tax. Failure to do so may cause negative repercussions (namely penalties and interest) at a later time.
If You Work in More than One State....
Though you have the ability to choose one state as your domicile, you may find yourself working in a few states as you travel. You will need to investigate your need to file state income taxes in each state you work in. Even though you don't live there, you may still be required to pay income taxes.
RV Domiciles State by StatesReady to find your perfect domicile? The following list contains pertinent information for all 50 states (yes, even Hawaii, though logistically it's not a good choice) to help you make your decision.
DisclaimerThis RV home base and domicile guide is intended to assist you with making a decision on which state to call home. Though we have done our very best to find current laws and tax rates, each state has the ability to change their rules at any time. Please follow the links above and verify everything before making a decision.