How to Establish Legal State Residency (Domicile) as a Nomad
One of the challenges that almost every nomad faces is where to call home. Of course, most vandwellers and travelers are happy to call wherever they happen to be home. After all, if you are a perpetual traveler and are set up somewhere in your car, van or RV, or if you are a backpacker and have all of your stuff with you, then anywhere can be considered home. Government agencies, however, tend to disagree with this perspective.
There are many nomads, including those who are new on the road and those who have been traveling for many years, who think that the only way to establish or maintain a “legal” address (domicile) is to break the law. Fortunately, this is not the case. In fact, not only is it possible to keep your residency status legal as a nomad, it can also save you considerable expense and trouble in the future.
The situation is complicated because our legal system has been developed around an assumption that people live in a house at a fixed location. People who travel perpetually do not fit into this legal model. As a result, many people resort to either breaking the law or choosing a new state that is more friendly to travelers.
You will ultimately need to do a lot of research on your own to decide which state will best meet your needs. There is not a specific state that is ideal for all nomads, though there is a short list of states that attract many full-timers. It is also not uncommon to find nomads who started with their residency in one state, but later switched to another as their needs changed over time.
Disclaimer: I am not an attorney, and do not claim to be an expert on legal questions. Please consult a licensed attorney if you are not confident that you understand the legal requirements or complications of establishing or maintaining domicile in a particular state. The information presented on this page is designed to serve as a starting point in deciding which state to choose as a domicile, and is based on my personal, extensive research.
Residency vs. domicile
Residency and domicile are actually two distinct terms, but “residency” is often used interchangeably for both terms. This unfortunately adds to the confusion when trying to decide if you are (or are not) legally a “resident” of a state.
The first concept to understand when considering domicile and residency is that a person may be a resident of multiple states, but is usually only domiciled in one state. For example, a person may own homes in several states and spend time in each of those homes during the year, but only one state will be their domicile.
As a general rule, the state where you are domiciled will be the state where you live (at least part of the year), work, receive mail, obtain health care, vote, conduct banking, register and insure your vehicles, etc. Of course, some people will do these things in several different states, but once you begin establishing a nexus (that is, a connection) with multiple states you also run a very real risk of having multiple states attempt to claim you as a resident for income tax or vehicle registration purposes. The best way to avoid this unpleasantness is to be careful to maintain a nexus with only one state, and to make a clean break when you move your domicile to another state.
The second concept that is essential to understand when considering domicile and residency is that receiving mail in a state does not mean that you are considered to be domiciled in the state. Mail receiving and forwarding services make it convenient to receive mail while you are on the road, but a mail forwarding address will generally not be accepted as a “street address” when applying for a driver license, for example.
The third concept that is important to any discussion about domicile and residency is intent. As a legal matter, you establish domicile when you are a resident of a state and intend to make that state your home. The best way, and often the only way, to prove that intent is through actions. While you may not have a mortgage or lease in the state that you choose as a domicile, you can and should register and insure your vehicles, conduct your banking, vote, and have medical insurance in that state. In other words, the more of a nexus or connection that you have with a particular state – and the less of a nexus that you maintain with any other state – the more likely it is that your claims to be domiciled there will hold up if ever called into question.
The issue of establishing domicile is further complicated by the fact that each state has its own rules about when it considers a person to be a legal resident. Worse, the rules often vary between state agencies.
Why choose one state over another?
Since as a nomad you are able to choose any state as your “home state,” why choose one state over another? The reason is that some states will better meet your needs than others.
Income taxes are a fact of life in most states, but several states do not have an income tax. Those who are still working can see an instant “pay raise” of hundreds or thousands of dollars just by “moving” to a state that does not have income tax. Similarly, states have different rules on taxation of pensions, investment income, and retirement income.
Sales tax is also collected in most states, but can vary considerably. While it is easy to think of the annoyance of paying sales tax on small purchases, it can add up to thousands of dollars if you need to pay sales tax on a new vehicle. This is particularly concerning to RVers who plan to buy an expensive vehicle in the future.
Vehicle registrations, inspections, and insurance are things that nearly all nomads will deal with each year. The cost of vehicle registrations and insurance varies considerably between states, so it is possible to save a lot of money each year by choosing a state with inexpensive registration fees and insurance. Auto insurance rates can also vary widely between zip codes, so it worth considering this as well when choosing an address. Vehicle inspections are not required by all states, and a few states like Arizona and Nevada have only select counties that require annual emissions or safety inspections. While safety inspections are only an annoyance if your vehicle is in good condition, they do require annual trips back to your home state. Emissions inspections, however, can turn out to be quite expensive. These inspections, and the related vehicle repairs, may be good for the environment, but they can be a financial disaster for the vehicle owner when the vehicle does not pass inspection.
Medical insurance options vary widely between states and even between counties. This is true even if you are purchasing insurance through the government health insurance exchanges. Research medical insurance options if you plan to purchase insurance, and particularly if you have certain conditions or treatments that you will need covered. Another consideration that many nomads face is the difficulty of finding nationwide medical insurance plans. Most plans currently available only cover medical services within a limited network in your home state. This makes these plans nearly useless other than for emergency room care if you seldom return to your home state.
It is also worth considering any current or anticipated need for social services or public assistance. It is no secret that some states are more generous with public assistance than others. Nomads who have limited income, for example, may find it better to choose a state with an income tax that offers more generous public assistance.
Finally, it is important to consider how much time you plan to spend in a state. How often do you plan to return once you establish your domicile in the state? The most popular states for nomads are all on the edges of the country. Despite the fact that you are on the road full-time, you may not want to make a special trip across the country just to renew a driver license or to obtain health care.
It is likely that, for most people, any one of these considerations will not be enough itself to make a decision. However, a combination of these considerations will usually make one state a much better deal.
Choosing a state
The easiest way to legally solve the “home state” problem is to maintain domicile in the state where you already live. Many nomads at least start off with this approach. You will still need both a street address and mailing address though. It is fairly common for nomads to switch everything from their former address to the address of a friend or relative when they are ready to get on the road. As long as your friend or relative is agreeable, trustworthy, and reliable this can be a good and simple solution. Staying at this address whenever you are in your home state, even if you sleep in the driveway, may further reinforce your legal argument that it is indeed your domicile. It is worth considering though whether your friend or relative may tire of managing your mail or may move while you are on the road. Many people who start off by using the address of a friend or relative eventually end up choosing a different option.
A similar option would be to move your domicile to a new state where a willing friend or relative lives. This may be more complicated because of the documentation that is required for obtaining a driver license, but with some time and care you should be able to collect enough mail or bank statements to satisfy the documentation requirements. Still, there remains the possibility of your friend or relative tiring of handling your mail or moving.
Homeless service agencies in either an existing or new state will also sometimes assist with establishing domicile. Nomads generally do not consider themselves to be homeless and may be offended by this idea, but the government generally does consider full-time nomads to be homeless if they do not have a fixed, permanent address. This may be a last resort for many people, and the rules and services vary between states, but it is an option that can be considered if necessary.
The final option for establishing or maintaining a legal domicile is to choose a state that is friendly to full-time travelers. Satisfying the legal requirements for domicile has become increasingly difficult over the years, and particularly in the wake of the terrorist attacks on 9/11. Still, several states are much more welcoming to full-time nomads than the others.
Popular states for nomads
Even though there are 50 states to choose from for domicile, most nomads quickly narrow the options down to several states. This is because these states have regulations that are at least somewhat friendly to nomads.
South Dakota
South Dakota is by far the most nomad-friendly state in the country. In fact, while most states enact rules that make it difficult for nomads, South Dakota has specifically adopted rules to make it easy for full-time travelers to become residents of the state. South Dakota requires only a one-day stay in a campground, RV park, or motel, an address with a mail forwarding service, and an affidavit of intent to establish residency to obtain a driver license. It also has no state income tax or vehicle inspections. Probably the only significant drawback to choosing South Dakota as a domicile is that it is so far away from the areas where a lot of nomads spend their time. The overall nomad-friendly nature of this state, however, makes it the clear winner if you are willing to return periodically as needed.
Texas
Texas is another popular state for full-time travelers. Texas is also home to the Escapees RV Club which operates both a mail forwarding service and the popular ESCAPEES:HOME program that allows nomads to use the campground address as a legal street address. This combination of services is one reason why Texas is popular with nomads, though Escapees also now offers the same service in Florida and South Dakota. Texas has no state income tax, but does require annual vehicle inspections. The process of obtaining a driver license in Texas is also somewhat more complicated than in South Dakota.
Florida
Florida is the third state that is popular with nomads. Aside from the promise of warm weather and sunshine, Florida also has many mail forwarding services. Proof of your street address will be required in Florida, but Escapees members are able to use documentation from the club to satisfy this requirement. Many nomads report that vehicle registrations and insurance are expensive in Florida, but medical insurance options are reportedly better.
Nevada
Nevada is less popular as a domicile than South Dakota, Texas, or Florida, yet it is still worth considering if you spend a lot of time in the desert like many nomads. Nevada will accept a receipt from a motel or RV park that shows you have been in the state for 30 days as proof of a street address. You will also need a mailing address. Like the other “big three” states, Nevada does not have an income tax.
Wyoming and Montana
Wyoming and Montana are popular states for businesses seeking a domicile for a shell corporation. They are less popular though for individuals. (I previously lived in Montana for several years, and currently am domiciled in Wyoming.) In both states you will have the typical challenges for establishing a street address to obtain a driver license. This makes it difficult to use either of these states if you want to do everything legally. Wyoming offers the benefit of having no state income tax, while Montana has no sales tax.
Which state should I choose?
There really is no perfect state for every nomad. Important considerations like vehicle registration and insurance costs, vehicle inspections, taxes (income and sales), and more vary between each state.
Most nomads end up choosing between one of several states because overall those states have regulations and costs that are friendly to nomads. South Dakota, Florida, and Texas are almost always the top three states for nomads, with Nevada also being worth considering. Still, because each person’s situation is unique, there may be occasions where it makes more sense to be domiciled in a different state (for example, location or access to public assistance)
Regardless of which state you choose as your domicile, it is important to do things legally. There can be significant legal complications that arise from trying to take a shortcut and skirt around state laws. It is worth considering one of the nomad-friendly states for your domicile, even if that means staying for a day (or month) in an RV park or joining a club like Escapees to have access to a legal street address.
The legal system in most states may be structured in ways that are not friendly to nomads, but there are still options that allow full-time travelers to do things legally. Be very careful about long-term ramifications for overtly, willfully and knowingly breaking the law – especially when it isn’t necessary.
