Last Updated on March 18, 2021 by Chris and Lindsay
If you are considering full-time RVing you need to consider the concept of domicile and residency. Domicile is a legal term that ties your life to one particular state for the purpose of everything legal and proper. Residency is where you may own a property and spend some time but can include multiple residencies and frequently change.
Having a domicile state is important for the purpose of paying income tax, voting and claiming public benefits such as health insurance, social security and medicare.
Even though you may call your RV home for 365 days of the year, the government still requires that you have a physical address in a state in which you can conduct all necessary and proper legal duties.
Many full-time RVers establish South Dakota domicile as a way to maintain a home away from home as they travel. It is important to have a physical address to which you can have a mail forwarding service direct your important business (such as taxes) as well as to tie up the loose ends around your personal life.
Regardless of where you call home you still need to have a driver’s license, register and insure your RV, receive correspondence and participate in locally-managed health care. Domicile establishes this for full-time RVers.
In this post, we’ll cover the pros and cons of South Dakota domicile and share with you why we chose NOT to become residents of South Dakota even though we have been full-time RVers for years.
Affiliate Disclaimer: This post may contain links to products we think you’ll like. If you purchase any of the products through the links below we’ll receive a small commission. As full-time RVers, we know our RV products well and only recommend those that we either own or would consider owning ourselves.
The Pros and Cons of South Dakota Domicile
Before we share with you the reasons why you may NOT want to change your domicile state to South Dakota, we want to cover the many reasons why it is good to consider your state of domicile.
Many full-time RVers want to cut ties to the brick-and-mortar life they left behind in exchange for the road. But unfortunately, there are several very important reasons why even the most footloose and fancy-free travelers need to have their roots laid somewhere.
As you will read, most of these topics cross and coincide with each other. Thus you’re going to want to give very careful consideration as to whether you want to make South Dakota your state of domicile.
Here are a few reasons why South Dakota is a great state for full-time RVers.
- South Dakota is friendly and accepting of full-time RVers
- The process of domiciling in SD is easy and relatively inexpensive
- RVing costs (registration, insurance) generally decrease with domicile in South Dakota
- Driver’s licenses are valid for 5 years
- Requires less than 2 days in the state (for drivers license) and RV registration can be done from out of state
- No annual vehicle emissions requirements
- No state income tax (including on retirement and social security income)
Physical Address and Mail Forwarding Service
Having a physical address is the core of virtually every topic that domicile entails. While owning property or claiming residency is helpful, you must be sure that you have a claim on the address that legitimizes your domicile and establishes the basis for other legal decisions. Most full-time RVers aren’t going to consider purchasing a property in order to establish residency.
Establishing a physical address for the purpose of having a mailing address is essential to getting a driver’s license, vehicle insurance and registration, health care and registering to vote.
But if and when you receive physical mail, subscribing to a mail forwarding service is incredibly helpful. Several companies offer mail forwarding services that cater to RVers.
If you choose to join Escapees to help you establish a domicile in South Dakota you can gain access to a mail forwarding service that ties your South Dakota residency to wherever you may be.
As a full-time RVer, you’ll learn that there are all sorts of ways to have mail forwarded to you. Many RV resorts will permit this. And you can also receive mail forwarding at the US Postal Service and private shipping companies such as UPS and FedEx.
Of course, if you know you’ll be stopping somewhere to visit a friend or family member you can have your mail forwarding service send your correspondence there.
And while much of our lives are online and digitalized these days, there are going to be times when receiving mail is essential.
Top Mail Forwarding Services for SD:
Pro Tip: While an Escapees membership includes all sorts of great perks, America’s Mailbox makes it possible to obtain a mailing address with a physical location in SD that meets this requirement if you have no other source to establish a claim.
If you live on the road, vehicle registration is a top reason why you may consider South Dakota domicile. Every state requires that you carry vehicle registration and insurance.
So having a domicile state is the way you accomplish this. Registering your vehicle was always easy when you had a steady life. You just had to head down to the DMV, show proof of ownership of the vehicle and cough up some cash.
And it is just as simple when you live full time in your RV. The only difference is that you have to go to a different DMV.
Pro Tip: South Dakota makes it easy to register your RV. You can complete all of the official paperwork through email and mail as long as you have a mailing address (see below for exactly how to do this).
Along with vehicle registration, you’re going to need to carry vehicle insurance. Vehicle insurance rates and insurance companies vary state by state and county by county.
So you will need to have a domicile established in a state where you can also claim a physical address. Auto insurance companies require that you have an address where you “garage” the vehicle.
Even if you don’t physically reside there permanently, this address is the legal definition that forms the basis of your insurance policy.
Pro Tip: If you use the mail services offered by Escapees they will help you establish a domicile in such a way that you can shop insurance companies and policies. But America’s Mailbox has a physical campground in SD which will allow you to “garage” your RV there.
Regardless of where you drive, if you are ever pulled over the officer will ask for vehicle registration and your driver’s license. Having a valid driver’s license is yet another string tied to your domicile and another opportunity for South Dakota to pull through for you as a full-time RVer.
You will of course need an address tied to the drivers license, which beckons the need to have a mailing address in the state.
Health Insurance and Health Care
Having proper health insurance and health care are important when you travel full time. Just like vehicle registration and insurance, the ability and option to purchase health insurance depends on your state of domicile and the county within that state.
With the Affordable Care Act dominating health insurance markets, your options for health care will be limited by the options made available in your state of domicile.
Note that we are not experts in health insurance but because it is a priority to us, we have spent lots of time researching our options and recommend that you do the same. Full-time RV health insurance is a very difficult topic regardless of which state you choose to domicile.
Pro Tip: Cities like Rapid City and Sioux Falls are popular areas that will provide the most options for health insurance. But outlying counties such as Clay County, also offer health care policies, assuming you have your residency established in that county.
State Income Tax & Federal Tax
There is the saying that there are only two guarantees in life. One of these is that you will owe tax, virtually in any and every year that you are alive. This is one of the most severe and serious reasons why you must have a domicile in a state.
The IRS will not be pleased if they attempt to correspond with you and you have not provided them with a way to stay in touch. Fortunately, all of the above information yet again ties together nicely when you domicile in South Dakota.
State Income Tax: Additionally, South Dakota has no state income tax. This in itself is a lucrative arrangement particularly if you have any sort of retirement income.
State Sales Tax: And if you do visit South Dakota to make big purchases you can expect to pay relatively low sales tax.
Register to Vote
Voting is a civic duty. And while you may not pay much attention to local and statewide politics as a full-time RVer, it is important that you retain the right to vote in any and all state, local and federal elections.
Domicile creates this opportunity for you to remain engaged in the political activities that define the United States.
How To Establish Domicile in South Dakota
So now you know why having a domicile is important, even if you want to cut all strings to your life prior to full-time RVing. And while you have options for doing this, establishing a South Dakota domicile is relatively simple.
The simplest way to set up a domicile in South Dakota is to do so through Escapees. With decades of experience, Escapees is not only the leading organization to help full-time RVers, but also they’re the best place to one-stop-shop the process. They have streamlined the process and make everything quick, easy and affordable.
But if you are not interested in paying for their services it is possible to piecemeal most of the process to some degree. Here are a few of the first steps you can follow:
- Sign up for mail forwarding. This provides an address for you in South Dakota you will use for other purposes.
- Stay in a campground/hotel for one night. Be sure to use your South Dakota address and list your name on the receipt.
- Go to a DMV for Driver’s License & Vehicle Registration. Use the campground receipt and formal paperwork to switch things over.
- Shop for RV insurance. Rates are lower in South Dakota than in many places but can be tricky (read below).
- Register to Vote. Use your official South Dakota paperwork to do your civic duty.
Read on for more specific information regarding the process.
Vehicle RV Registration
You can change your RV registration by going through one of the most popular DMV offices in South Dakota. Clay County will permit you to do the process via phone/email/fax if you follow this process. Aside from the fees directly associated to the type and age of your RV, the process will cost around $40.
- Fill out the application for registration. You will need to verify the VIN with a local police department, which can often be done for little to no cost.
- Fill out the non-resident affidavit. If you are planning to set up an address within the state then this is not required.
- Submit the original vehicle title, your current driver’s license and a copy of your social security.
The county treasurer’s department will process the paperwork and assign the fee to be paid. They will mail you 2 license plates and the new registration and title within a few weeks to the mailing address you provide.
Obtaining a South Dakota driver’s license is a little more costly and technical as it will require that you physically visit the DMV in a particular county in the state. Here’s the process:
- Set up a mail forwarding service to establish a mailbox in South Dakota. Again, Escapees is a great one-stop-shop for this. But there are plenty of other options as well.
- Stay at a local hotel or campground in South Dakota. Use your mail forwarding address in official documents and be sure to get a copy of the receipt stating this.
- Visit the Department of Public Safety, complete the associated forms and process and surrender your current driver’s license in exchange for your new South Dakota one.
Obtaining RV and auto insurance in South Dakota is a little more difficult. This is because you must make sure you have a “garage” for your vehicle. This is more than just a PO box. It has to be a physical address in order for the insurance companies to offer you a policy.
Circumventing this requirement is all but impossible due to the legal ramifications of falsifying information to the company. So here is where you may want to again reconsider America’s Mailbox or a similar service as their mail service links to a physical address in South Dakota.
In all honesty, this is the step that tripped us up and made us reconsider the whole process. It also led us to the point where we decided that domiciling in South Dakota was a terrible idea – for us.
South Dakota requires that you carry auto insurance. However, to complete the steps above you do not need to prove insurance in the state. So if you plan to travel to Mexico and further south where each country will require its own auto insurance purchased at the border you do not need an auto policy in South Dakota.
Many ex-pats living in Mexico and beyond will register their vehicles and obtain driver’s licenses in South Dakota but not carry the redundant auto insurance policies. So consider where you want to travel and whether it will require US auto insurance.
The Cons: Why South Dakota Domicile is a Terrible Idea
OK, so domiciling in South Dakota is not a terrible idea. But it was for us. And the one, simple reason why is because we were already domiciled in arguably the BEST state for full-time RVers: Florida.
Florida, along with Texas, are equally popular states as South Dakota and for similar reasons. We were overwhelmed by the number of South Dakota license plates we saw on RVs and thought for sure we needed to make the same decision.
But we were wrong.
Here are a few of the cons to consider before rushing to change your domicile:
- Health care options are incredibly limited in SD
- There are no income taxes in Florida either
- Florida driver’s licenses are valid for 8 years and cost less than $50 upon renewal
- Florida also does not require an annual emissions test
Apples to apples, there are many overlaps between domicile in South Dakota and in Florida or Texas. So there really is no need to change domiciles if you live in Florida or Texas. Doing so would be a terrible decision.
The biggest reason why we chose to maintain our Florida domicile has to do with the health insurance options available to us as Florida residents. Because health care is so important to us as we travel with Crohn’s Disease, having great health insurance meant a lot to us.
When we left for full-time RV travel we were covered under a great plan through the Affordable Care Act that was not only within our budget but also was portable to most states.
Note, this is not true for all health care plans – even those offered in Florida. So be sure to investigate your options if you, like us, rely on the peace of mind of knowing that you have great health insurance.
Wrapping Up The Pros and Cons of South Dakota Domicile
There are lots of factors to consider when deciding whether to domicile in South Dakota. From RV registration and insurance to health insurance and the ability to vote, you have to weigh a lot of options.
Unless you are leaving Texas or Florida, South Dakota is a great state to consider as your domicile if you plan to live full-time on the road. If this is the case, then it should be an easy decision and we hope that we have helped you make it!