Full disclosure: We never set out to be domicile experts, but due to the nature of our business we have been called on by many clients to review domicile options. Our goal for this page is to shine a light on other viable domicile options and to expand clients’ minds outside of the Big 3.
What is a domicile?
A domicile refers to an individual’s primary and permanent residence, typically the place where they live and intend to remain for an indefinite period. It goes beyond mere physical presence, encompassing the intent to establish a lasting connection with a particular location. Domicile is often used in legal contexts, such as determining an individual’s tax obligations, voting rights, and eligibility for various benefits. Establishing a domicile involves factors like the duration of residence, personal connections to the community, and a clear intention to make that place one’s home. It is a fundamental concept in various legal systems, playing a crucial role in defining an individual’s rights and responsibilities within a specific jurisdiction.
For full-time RVers and digital nomads, the decision of choosing a domicile is extremely important.
The Big 3
Up to this point, the primary 3 states used by full-time RVers and digital nomads have been Florida, Texas and South Dakota. Lately, there has been some pushback from the state governments of the Big 3 trying to close some of the loopholes that provide freedom to these nomads.
What is the best state to domicile in?
The answer is…it depends. Everyone’s circumstances are different. Everyone has different priorities or considerations. We’ve researched the answers to the most common of those considerations for you to consider in making your decision. We’re only bringing up subjects for you to reflect upon.
The most commented upon consideration is income tax. Florida, South Dakota and Texas have benefited the most from the perceived benefit of no income tax. What’s often forgotten or ignored is the question, if they aren’t getting their funding from income tax, where are they getting it from? Be certain of this, the government; local, state and federal, is going to get funding, one way or another. In our chart below, which is downloadable here, we are hitting some of what we see are the important points. State income tax rates, car insurance rates, homeschool laws, business laws, vehicle inspections, car tags and state sales tax are all compared below in the chart.
Insurance
A commonly overlooked consideration regarding domicile states is insurance rates. Not just vehicle insurance but also Health insurance rates that can greatly impact your monthly budget. Be aware Health insurance coverage with the same name (ex. PPC) can be substantially different from state to state. These issues are difficult to generalize due to each of us having different driving and medical records so we can only show the base rates.
This graph is up to date as of July 2023. The data is for informational purposes only. Individuals should do their own research and determine what domicile option is best for their situation.
Questions?
Still have questions and want to talk through domicile issues with someone, we offer 30 min domicile consultations for $50. Book here.
