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by Donna B.
Yeaw
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Please note that these articles
are primarily targeted at residents of the USA but the principles should apply
to anyone, anywhere.
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You did it. You hit the road and you're now a
full-timer. Your home is now wherever you park it. Or is it? Where are your
vehicles registered? What state issued your driver's license? Do you still own
land or a house somewhere? Where are you registered to vote? What do you use for
your mailing address?
These are just some of the things
that can reflect "where you live." Choosing a home base state can be a
very important decision and not just financially. We'll discuss some of the
major issues that need to be taken into account but remember everyone's
situations are different. Your choice of a home base state should be tailored to
you and your circumstances.
DO I NEED A HOME BASE STATE
Many full-timers don't feel they need to "declare" a home base state.
They feel they live on the road and don't need to be concerned. So do you really
need to choose one? And if you do, what is the difference between a home base
state and a legal residency or domicile?
Choosing a home base state is based on declaring a legal residence or
domicile in that state. This can be as simple as obtaining a mailing address
(other than a PO Box) in that state and using it for obtaining your driver's
license, registering your vehicles, etc.
Some people feel they can register their vehicles in one state, get a
driver's license in another, register to vote in a third and declare a fourth as
their legal residence. While this is possible, it is NOT a good idea. States act
very peculiarly when they think you are trying to circumvent paying their fees
and taxes. Once you have made your evaluations, stick with that state. Use it
for everything - take the good with the bad. Things will even out if you have
made an informed decision.
WHAT SHOULD I CONSIDER IN
CHOOSING A STATE
GENERAL:
- Do you already own property (raw land or a house) somewhere and if so, do
you intend to keep that property?
While you may feel that the state where you own property is not your
legal residence any longer, the state may feel otherwise. This is the time to
consult your accountant and attorney.
- Do you intend to vote?
You will need to consider what the legal requirements are for voting in the
state. Some states require a residency period, some require a physical address
while others specify a street address is needed. The majority do allow you to
register by mail, though.
- Do you intend to spend any actual time in your home state?
If you plan on spending any significant time in your home state, there are some
other items that you need to consider. Here are just a few . . .
- average climate
- crime rate
- access to medical care
- Will you make any major purchases in this state?
If you do, you will want to consider the impact of sales tax on your budget. (Be
sure to read the tax section in part two.)
- Where do most of your family/friends reside?
If most everyone who is near & dear to you resides in your home base state,
you will have even more reason to visit it on a regular basis.
VEHICLES:
- What will it cost to register your vehicle(s) each year?
This means not only your RV, but your car or truck. States vary drastically and
this can be another drain on your annual budget. Some states are flat fees, some
charge by weight and some by value. Be sure you know what your annual charge
will be.
- Are there any surcharges for bringing vehicles in from out of state?
Another surprise cost. When we moved our vehicles into Florida, for example, we
had to pay an additional $100 per vehicle for bringing them into the state. In
addition, if any of the vehicles had been purchased fairly recently we could
have had to pay additional sales tax on top of what we paid in the state of
purchase.
- Is there a surcharge or personal property tax on vehicles?
Some states have a personal property tax or an "ad valorem" tax that
can be quite a surprise if you aren't expecting it. This tax can run into
several hundred dollars for cars and trucks - imagine what it could be for an
RV! From personal experience, Colorado, Virginia and Georgia all have this
type of tax. I have also been told that Washington & Arizona do as well
Indiana (boats & RVs only).
- Will you need to have your vehicle inspected? If so, how often?
Many states have enacted emissions inspections in addition to safety
inspections. These cannot be done remotely so they will require a visit before
renewing your tags.
- Can you renew your auto registration by mail?
Every state I have lived in allows this, but there may be some that don't. This
could require an additional annual visit if your tags don't expire in the same
month as your driver licenses.
- Can you renew your driver license by mail?
If not, are you prepared to make an annual visit when renewal time comes around?
Many states use your birthday for your expiration date - if yours is in January
and your home state of record is Michigan . . . need I say more?
INSURANCE:
- What will the impact be on your medical insurance?
How do the rates compare for various states? This can be a very touchy area. Not
only do you need to worry about the cost for your insurance, if you already
participate in a plan, you need to find out how transportable the coverage
actually will be. HMOs and PPOs will cost you more for services when you travel
outside their network area.
- You will have to have insurance for your vehicle. Be sure to check the
rates for all your vehicles, including your RV.
This can be another surprise. Colorado Springs, for example, is a beautiful
place to live or retire. But due to the high number of military installations,
and thus a lot of under 25 males, the auto insurance rates are higher than
cities two or three times its population.
- Do you have or will you be purchasing new life insurance?
If so, check with your agent to see if there are any differences between the
states you are considering.
HEALTH:
- Do you have any chronic illnesses that require annual or more frequent
attention?
If so, you will want to be sure that you have easy accessibility to the health
care professionals you need when you need them.
- How does the state you are considering treat issues such as living wills,
durable powers of attorney, etc.?
This goes hand in hand with the estate tax issues above. Don't ignore this -
your family will be the ones to suffer if you do.
Stop back next time to learn about the tax implications of your choice, where
to find resources to help you in your evaluation (both on-line & off), as
well as an overview of some of the favored states. Until then, keep on rolling!
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