Sunday, April 10, 2011

New Scrutiny in South Dakota Residency

We are currently involved in the residency dilemma, we are life time residents of the state of our origin, namely Minnesota and Iowa, but now we live on the road and spend most of our time either in the Midwest or Florida.
We do not own property in any state at this time and rent RV lots on a month to month basis in both Florida and Minnesota.
We file taxes in the last state we owned property in and do the majority of our small business in, but when it comes to financing a new RV, major purchase or insurance we don't have a "garaging" address at this time. ("Garaging" is a figurative term used by Banks and Insurance Companies, they want to know where you will be parking your RV in case they ever have to come and get it). No "Garage" no loan or insurance.
We use a UPS mail forwarding system for mail. Many Full Time RV sites and clubs offer mail forwarding and state residency in RV favorable states, such as Florida, Texas and South Dakota, but this process is now being brought under scrutiny by legislative officials who feel they are being cheated out of their respective taxes.
I'd like to make it clear, we don't want to avoid paying taxes or dodging our debts, we just have to find a way to have a legal address for insurance, banking and mail without having to own or renting real property, (property that has a house on it). We have been told renting a lot semi-annually is now not enough to prove residency.
 We would love to find an answer to this problem without having to buy or rent a full time home somewhere, we seem to have fallen between the cracks in a new legal policy that didn't take nomads like ourselves consideration.
We are considering Florida as our future domicile, as we spend the most time there, but we don't stay at RV resorts or parks that provide a physical address. In light of our predicament we have been researching state domicile issues and haven't found any clear answer, but found some information that may soon be "troubling the waters" for RV Nomads.
Here is more disturbing news for Full Time Rvers who took advantage of South Dakota's easy residency requirements, and other states are soon to follow suit.
The following is and excerpt posting from a popular Full Time RV site, the link is below....

South Dakota is one of the states popular with fulltime RVers. Not so much for making visits there, but with no state income tax and low fees on vehicle registrations, some fulltimers make the Mount Rushmore State their legal domicile. Now, according to a local paper, state authorities are asking questions that are making some RVers uncomfortable.

The Argus Leader says that state officials recently sent a memo to county treasurers throughout the state, mandating more information from folks renewing or applying for vehicle registrations. “The goal,” says Debra Hillmer, chief of the state’s Motor Vehicle Department, “is to discourage falsified applications and collect information on where people really reside. Ultimately, that information could be used by other states to crack down on their residents who license cars, boats and motor homes here.”

Apparently this information swapping has already started. Witness a 2007 information exchange between Nebraska, Iowa, and South Dakota. Comparing Nebraska driver license data to South Dakota and Iowa motor vehicle registrations yielded some 13,000 matches–8,000 alone from South Dakota. Nebraska’s DMV was not pleased, figuring the crossovers cost Nebraska plenty of tax money.

But it’s one thing for neighboring state residents to try and cheat on taxes; the issue for full time RVers is a whole different matter. It’s often held fulltimers can choose any state they want to call “home,” from a legal perspective. South Dakota doesn’t disagree with that, but the requirements to ‘prove up’ your domicile status can be a bit of a pinch. While “nomads” as the official state jargon calls fulltimers, are welcome to register vehicles in South Dakota, those who use a mail-forwarding service address must sear out an affidavit that they have no other address outside of South Dakota.

That could prove problematic for those who own a deeded RV lot in say, Texas or Arizona, but chose to only visit the place occasionally, or never touch tire there, and simply rent it out to others. Or what about the snowbird who maintains a post office box in a snowbird town for the convenience of receiving that mail forwarded from South Dakota. Lie on the affidavit and you’ll set yourself up for a possible felony charge.

The issue is one that’s emotionally, and politically charged. Some point the finger at pressure put on popular fulltime domicile states by neighbors jealous of the revenues made. Others say that the increasing noose of US Homeland Security regulations are at the base of the controversy.
Originally posted on Full Time Rver
by Russ & Ti簽a DeMaris


Brian @ Wanderings said...

I think we'll be seeing more of this as cash strapped state governments turn over every rock they can in an attempt to find some spare nickels. The problem for us full-time wanderers is that there is no way to prove that we reside anywhere specifically, which leaves us open to tax claims from state governments everywhere, generally. I take some comfort from the fact that Escapees of Texas has successfully defended the residency status of its members in court at least twice. That doesn’t mean another state won’t claim me as one of their own, but at least I have the Texas courts on record saying I’m a legitimate resident. And I think that is probably about as much as we can hope for.

Doyle and Terri Johnson said...

We do spend about two months in Texoma during the early Spring, it is a possibility for us to try domicile there, on recent full time forums there has been some problem with insurance and banks even in Texas for Full Timers using Escapees.
We'll have to wait and see on this one...

Donna aka Froggi said...

There has been much discussion in the Escapees forum about the SD issue. All that has been required is to spend a night in a campground, have a receipt from them showing BOTH your names, on you should be set. We use, small town where everyone knows everyone.

Be sure to check out the costs of TX, SD, FL, etc., they can differ drastically by state.

Most mail forwarding services that cater to RVers will provide you a physical address to use. I know AmHomeBase in Florida still does as well as all the ones in SD and the Escapees service in TX.

Doyle and Terri Johnson said...

Thank you for the info...much more research to do I guess..

Robert said...

Quoted from your next to last paragraph:
"That could prove problematic for those who own a deeded RV lot in say, Texas or Arizona, but chose to only visit the place occasionally, or never touch tire there, and simply rent it out to others."

Why is this any different from the thousands of folks who own property in multiple states? There's obviously no legal reason in this country one cannot own multiple properties/houses/boats, etc. in every state in the union for that matter. I think these state will find their opening a can of worms and realise they cannot pin point a few folks as long as those folks are not doing anything illegal.

Anonymous said...

What if we own rental properties in IL?? Can we still establish residency in SD?

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