We sold our home in June of 2018 before it ever hit the market. Fortunately, our buyer was from Germany and had a 45-day closing, which allowed us some breathing room to sell our belongings, make final arrangements, and say goodbye to our wonderful neighbors. But we were confused about setting up a domicile and did not realize the importance of having a “legal” place to live.

Why is Your Domicile Important?

Since our home sold quickly, we had a limited amount of time to figure out where we wanted to “live.” Domicile is one of those words courts and lawyers toss around and expect people to understand. In fact, it’s meaning can be tricky. It is not just about setting up a mail service account and having a mailing address. Simply put, your domicile is your home—the state you consider your permanent place of residence. If you are not living there right now, then it is the place to which you intend to return and make your home indefinitely. I repeat, it is the state where you “INTEND” to return and make your home indefinitely. You can have more than one residence, but only one domicile.

The question of your domicile typically arises when we talk taxes and you have declared to have domiciled in a particular state. The courts often look at several factors to determine domicile. The first as we said is your INTENT (sorry to yell but this is very important). Other factors are where you have your vehicles registered, what state your drivers license is from, where you get your mail, and where are you registered to vote….where do you pay your taxes?

Speaking of taxes, your domicile can impact several taxing entities and that is the main reason your domicile may be scrutinized.

State income tax. Most states impose an income tax on people who live or work in the state. If you’re domiciled there, you pay tax on all of your income; if you’re not, you pay tax only on income derived from sources in the state. (Even if your domicile is elsewhere, however, you may be assessed tax like a domiciliary if you are a “resident” under state law.)

State estate tax. Fewer than 20 states impose their own estate tax—that is, a state tax on assets left at death. If you’re domiciled in one of these states (such as New York or New Jersey), your survivors may end up paying a tax bill that wouldn’t be due if your legal domicile were in a non-taxing state (such as Florida or Arizona).

Probate. If surviving family members need to start a probate court proceeding to distribute your assets to the people who inherit them, they must begin it in the state (and county) where you were domiciled at your death.

Domicile Friendly States For RVers

We retired prior to going full-time so retiree friendly states were very important to us for the above stated reasons. My pension is through the Kansas Police and Fire retirement program and we paid state income tax while working so it was very important for me to find a state with no income tax.

We found the following states do not have state income tax:

• Florida
• Texas
• South Dakota
• Alaska
• Nevada
• Washington
• Wyoming
• Tennessee

Another important factor for us was the vehicle property tax. In our former state (Kansas), we literally had to take out a loan every year we paid property tax on our vehicles and I was done with it. Here are the states with no vehicle property tax:

• Florida
• Texas
• South Dakota
• Alabama
• the District of Columbia
• Delaware
• Georgia
• Hawaii
• Idaho
• Illinois
• Louisiana
• Maryland
• North Dakota
• New Jersey
• New Mexico
• New York
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Tennessee
• Vermont
• Washington
• Wisconsin

Tracy

Tracy, the expert behind OurNextRVAdventure.com, brings over 9 years of experience in travel writing and RV living. With a Master’s degree in Travel and Tourism Management, she offers in-depth knowledge on RV maintenance, scenic routes, and campground recommendations. Connect with her adventures on Pinterest, Facebook, and Instagram.

ournextrvadventure.com

The post Going Full-Time? Lets Set Up Your Domicile appeared first on Our Next Rvadventure.