One of the best things about going nomad (besides the ability to explore all sorts of interesting places) is having essentially free agent status when it comes to choosing a home base. For some people, calling a certain place home is a point of pride regardless of whether or not it confers any actual benefits.
If we were going that route we’d definitely be Californians 🙂 *
It is a bit irksome to me that it’s practically impossible to be an actual nomad, calling every place (or no place) home. Businesses and governments want to know where we are, or at least how they can get in touch with us and if we might be obligated to them in any way. We’re pretty much forced to enter into a legal relationship with one place or another, including whatever rights, responsibilities and obligations that might include.
This legal relationship is known as domicile.
The domiciler’s smorgasbord
For several reasons I’ll mention in a moment, neither Georgia (our current state of residence) nor New Hampshire (where we previously planned to move) made the short list of places we considered for a home base.
California? We can’t even… My former home state loses in every single category except weather. I love that it’s perpetually sunny and 70°, but admit it’s hard to enjoy the balmy weather when you’re starving. Avoiding starvation is one of the reasons I left years ago. I thought about making a “Will work for food” sign, but I’d probably collect exactly zero dollars if anybody saw me getting out of our fancy-looking RV.
But I digress…
So, there are more or less advantageous domiciles all over the U.S. (and the rest of the world, too, but we’re probably not driving to Chile). Three U.S. states offer enough benefits that they attract the majority of full-time RVers who want to change their domicile: Florida, Texas and South Dakota.
Most considerations are financial, but some involve logistics. For us, South Dakota offers the combination with the most upside and least downside. Your mileage may vary, but here’s how it shakes out for us.
Lowest taxes by far
South Dakota’s overall tax burden is second lowest among US states (Wyoming is #1). It has no state income tax, nor does it have a personal property tax. While we don’t have any interest or dividend income to worry about (gosh it would be nice to have this “problem” in the future), South Dakota is one of only six states that don’t tax it. This is pretty important for retirees. Nice, but again – not applicable for us.
South Dakota sales tax is a relatively low 4%. That’s the same as the state of Georgia, but the area we live in pays an additional 3%. Small potatoes until you start talking about things like buying a $50 – $150K+ vehicle. New Hampshire doesn’t collect sales tax, either, but makes up for it with a hefty property tax.
As self-employed folk, another important financial consideration for us was business taxes. South Dakota has no corporate income taxes. If we domiciled in New Hampshire we might have to pay corporate taxes, so the fact that they it has no state income tax would be irrelevant for us.
Cheaper, hassle-free vehicle registration
Our RV registration in South Dakota was $411. In Georgia, it would have cost $395 but we would’ve had to have the coach inspected by a law enforcement officer. We did have to pay sales tax on our RV purchase, but in Georgia it would have cost us $3,500 instead of the $2,000 we paid to South Dakota.
There’s no annual vehicle inspection requirement in South Dakota, so we won’t have to worry about making an expensive or time-consuming trek across the country just to do that. They make it easy to handle the whole registration deal by mail.
We paid $1,010 for a year of fairly comprehensive insurance for our RV. Since we’re not domiciling in Georgia we didn’t price an equivalent policy for that state. According to my research, the cost of insurance in South Dakota is generally about 40% less than what we’d have had to pay in Georgia. Wowza.
The health insurance market ain’t so healthy
Health insurance is the most common reason I’ve heard given by RVers who’ve chosen another domicile, or switched to Florida or Texas after domiciling in South Dakota. As I understand it, there were only a couple of plans available in South Dakota that would work nationwide, and those were recently dropped.
We currently have no health insurance, and won’t be able to afford it until we can get out from under some of the financial burdens we’re carrying. So I suppose it’s a bit of a blessing we don’t need to factor health insurance into the domicile equation.
When we can afford insurance, though, we’re not buying insurance per se. We’ll go with a health sharing plan. It’ll work nationwide, so once again we should be good to go with our South Dakota domicile.
They have an actual winter season
Another potential downside is South Dakota’s winter weather. As nomads, we don’t have to be there for it. But it’s remotely possible that something would come up requiring us to travel there during its less hospitable months.
If you want to conceal carry a firearm, be patient
The last potential downside involves concealed carry permits. We haven’t made up our mind whether we’ll want permits or not, but if we do we’ll have to stay in South Dakota at least 30 days before they’ll issue us permits.
In many places there’s so much hassle involved with the types of firearms you’d carry concealed that they might not be worth keeping at all.
Buh-bye, Peach State
Now you know why South Dakota gets our vote, and why we can’t even think about domiciling in Georgia (New Hampshire, either) right now. Since most of the deciding factors involve laws, a lot is subject to change. If another state works as hard wooing RVers as South Dakota does now, we may roll away from Rushmore.
* Brian doesn’t usually see my blog posts before they go live. Even though I say “we” and “us” a lot, and we’re usually pretty much on the same page, the views expressed here are mine. Sometimes I throw things in just to get a reaction out of him 🙂 Since he handled all the RV paperwork I asked him to fact check this post and provide me with the numbers. He did, and also included a personal statement:
“California residency over my dead body.”