Domicile/Tax Question

We're planning to go full time as soon as we sell our house this spring. The thought is to domicile in South Dakota for all the known reasons. The plan is to obtain a PMB (personal mail box, likely Americas Mailbox) in SD. Then obtain drivers licenses, vehicle registration, etc. there. Move everything we can to SD. Thinking though this move the one sticking point is financial institutions. Financial institutions require a physical address. I think they all do now, or are in the process of requiring it.

So, it's been suggested we use a friend or relatives address. We know no-one in SD that we could use. Do have a niece in Wisconsin which would work well. However, I'm concerned that giving them a Wisconsin address, even with a SD mailing address, would trigger income tax liability in Wisconsin. The big chunk is in Vanguard who do require a physical address. Has anyone come up against this problem, domicile in SD but stating physical address to financial institutions in another state?

Second option is to buy a house in Prescott Arizona, where we plan to land in 1 or 2 or 10 years, and rent it till we're ready for it. Have to pay taxes on the rental in AZ. But could we use this address for finances? Same trouble though, could there be tax liabilities in AZ by declaring that rented house as our physical address?

Anyone have experience domiciling on state A, but giving an address to financial institutions from state B?

Just trying to think though be problems before they smack me in the face. Thanks for any help.

I've had a Florida PMB for about 10 years and my banking, stock accounts, credit cards all use the PMB address with no problems.  I did have a Florida house address in the past, maybe this helped?  But anytime I start any new account I use the PMB with no problem.

What is it that you would list as being in Wisconsin? If your vehicles are titled in SD, your driver licenses are SD, where does Wisconsin fit in?  And you do NOT keep the RV in Wisconsin, where do their taxes fit in?  You would need to check Wisconsin tax law and how it relates to whatever you are doing there (in the legal sense), but nothing you've said so far seems to have any state tax implications. You would likley only have problems if you brought the RV to Wisocnin for an extended period, or worked there did other "residence" things in WI.

currinh said:

Thinking though this move the one sticking point is financial institutions. Financial institutions require a physical address. I think they all do now, or are in the process of requiring it. 

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With all due respect, not all financial institutions require a physical address other than your PMB.  Since you haven't yet made these changes, no doubt you're relying on what you read on forums like this one.  The trouble is that a lot of what you read is simply incorrect.

We've been full-timing for > 7 years and use MyDakotaAddress in Madison SD.  All but one or two of our banks, credit cards, etc, have been quite content to use our PMB address with no questions asked.  Our credit reports are keyed to that address.

For the couple of financial institutions that have wished to have a physical address, all of them have been quite content to accept any address we offered.  It doesn't have to be in the same state as our PMB address!! The request for an address is a Patriot Act requirement that went into effect roughly a decade ago.  It's not new.  Under the Patriot Act, you are entitled to offer them the address of a relative or any other address at which people should be able to contact you.  We used to use our daughter's address in Maryland, but now that we own an RV site in TX, we use that address even though it's not our domicile address.

In summary, it's not a big deal issue and not a new one.  Relax and enjoy being a full-timer.

Joel (AKA docj)

yolo said:

I've had a Florida PMB for about 10 years and my banking, stock accounts, credit cards all use the PMB address with no problems.  I did have a Florida house address in the past, maybe this helped?  But anytime I start any new account I use the PMB with no problem.

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Yolo: Thanks. I've heard the same from many. But have heard a few horror stories. If they wanted a physical address we can use our niece's, as long as that state doesn't want capitol gain taxes.

Thanks again.

Gary RV_Wizard said:

What is it that you would list as being in Wisconsin? If your vehicles are titled in SD, your driver licenses are SD, where does Wisconsin fit in?  And you do NOT keep the RV in Wisconsin, where do their taxes fit in?  You would need to check Wisconsin tax law and how it relates to whatever you are doing there (in the legal sense), but nothing you've said so far seems to have any state tax implications. You would likley only have problems if you brought the RV to Wisocnin for an extended period, or worked there did other "residence" things in WI.

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I hope they have the same reaction that you do. We plan to move everything we can to SD to have as solid a domicile case as possible. We plan to spend no more than a week a year in WI. However, if we're forced to give a financial institution an address in Wisconsiin, does that somehow trigger capitol gain taxes there? If not we're golden.

Thanks for the perspective, I hope you are correct.

docj said:

With all due respect, not all financial institutions require a physical address other than your PMB.  Since you haven't yet made these changes, no doubt you're relying on what you read on forums like this one.  The trouble is that a lot of what you read is simply incorrect.

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Yep, got me pegged. But if you read enough Internet info you usually end up with a decent understanding. The incorrect parts tend to wash out. But then....

docj said:

We've been full-timing for > 7 years and use MyDakotaAddress in Madison SD.  All but one or two of our banks, credit cards, etc, have been quite content to use our PMB address with no questions asked.  Our credit reports are keyed to that address.

For the couple of financial institutions that have wished to have a physical address, all of them have been quite content to accept any address we offered.  It doesn't have to be in the same state as our PMB address!! The request for an address is a Patriot Act requirement that went into effect roughly a decade ago.  It's not new.  Under the Patriot Act, you are entitled to offer them the address of a relative or any other address at which people should be able to contact you.  We used to use our daughter's address in Maryland, but now that we own an RV site in TX, we use that address even though it's not our domicile address.

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Good to hear the physical address doesn't have to be in ones domicile state. If that doesn't trigger any state income to be taxed we're good.

docj said:

In summary, it's not a big deal issue and not a new one.  Relax and enjoy being a full-timer.

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That's what my wife has started saying. I'm likely being a little too OCD here. I just hate to be surprised.

Thanks for the help.

currinh said:

If that doesn't trigger any state income to be taxed we're good.

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If you provide an additional address to meet the Patriot Act requirement, it doesn't get used for ANYTHING!  It doesn't become the address for billing or contact purposes; it's just something they can use to check a box.  There are no state income tax issues because IT NEVER SHOWS UP ANYWHERE!!

Relax, it will all be OK.

When I sold my home in Ca last year, I simply contacted my bank via on line banking and gave them a new home address, which BTW is Madison SD. I ordered new checks and that was it. All my on line banking occurs just as before, and I have always done paperless statements, so they just show up in my email.  The bank still has my account,  that's what they care about.

currinh said:

Financial institutions require a physical address. I think they all do now, or are in the process of requiring it.. . . . The big chunk is in Vanguard who do require a physical address.

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Forget taxes, forget owning property, and start over.  Your SD mail forwarding service IS YOUR PHYSICAL ADDRESS, which simply means it is an actual street address. 

The legal requirement is that you can't use a P.O. Box number.  That is what the Patriot Act requires under the Customer Identification Program (CIP) that all financial institutions must implement.  Did Vanguard actually tell you it had to be a house?  Or did you or the Vanguard rep misinterpret what "physical address" actually means?

I too am planning for full time and checked this out with Schwab and banks a year ago.  You can't use a P.O. Box number for financial/tax filing dealings is the point and I think much of the confusion (on the web and at banks) comes from people who incorrectly think physical address means a house or equivalent, which it does not.  They are quoting the term used in the regs, and it would be much better if they would just call it what it really is and what we all called it for years prior to the Patriot Act and prior to attorneys and bank consultants who fail to understand what the law actually means ---- a STREET ADDRESS. 

Each FI writes it's own CIP, and if they tell you it has to be a house etc., then it is doing so via their own policy, not because they are actually required to do so by federal law.  They also don't NEED to make copies of DLs as many are want to do, or need to know your profession as my local bank insisted on just recently And then not accept "retired" as my answer.  We can't fight the FIs polices of course, but we can find one to give $$$ to which knows what it is doing.

Would hate to see you complicate matters by using a Wisconsin address when it is totally unnecessary, and which could complicate something down the road.  Keep it simple, and when a bank asks for your address, give them the one provided by your mail forwarding service.  If you want more confirmation, call the owner at America's Mailbox in SD (even if you don't plan to use them) and he'll fill you in on why it works.  You don't need another mailing address, you don't need a house, or property, or anything else beyond the Street Address provided by your mail forwarding service.

L

Dreamsend said:

I too am planning for full time and checked this out with Schwab and banks a year ago.  You can't use a P.O. Box number for financial/tax filing dealings is the point and I think much of the confusion (on the web and at banks) comes from people who incorrectly think physical address means a house or equivalent, which it does not.  They are quoting the term used in the regs, and it would be much better if they would just call it what it really is and what we all called it for years prior to the Patriot Act and prior to attorneys and bank consultants who fail to understand what the law actually means ---- a STREET ADDRESS. 

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Although you are technically correct, be aware of the fact that most financial institutions use a database that clearly shows that the street address I give them in Madison SD is a PMB, not a "real residence."  It's this which occasionally triggers the request for an additional address. 

PMB's are acceptable for most uses, and appear to have become more acceptable in the past ~7 years that we have been fulltiming.  When we started the state of SD refused to let me use the PMB as the address of record on my CDL--now they have no problem accepting it.  Just be flexible and work with the institution to find a "work around".  For example, when SD wouldn't let me use my PMB on my license, they were more than happy to let me use an RV park's address that I had stayed at ON MY LICENSE with my PMB address being the "mailing address" for my file.  Sounded crazy, but it served their needs and mine!

I live in Missouri. I have had a UPS PMB for 15-20 years. It is a physical street address. I have only given my residence address to obtain property insurance and utilities on it and gave my PMB for mail. I refuse to give my residence address for any other purpose. I have never had a problem. My voter registration is for my residence address but comes to my PMB. I have to have a mailbox at my residence, but have never received any mail there. Never had a problem with any financial institution. Too many other banks etc to worry about it. I?d just move on.

Thank you all for the replies.

Didn't hear a definitive answer about taxes using an address outside ones domicile state. It seems one can use an out of state address, but it may cause tax problems. However, I think we've found a solution for us. We remembered some old friends who have a residence in South Dakota. We contacted them and got the OK to use their address. I just sent paperwork to Americas Mailbox to set up a PMB. We'll use the PMB for as much as we can, and certainly for all mail. But we now have a backup brick and mortar address if push comes to shove.

I told our friends the only need for a brick and mortar address is (if we are caught laundering money or running a terrorist cell) a place to send the swat team. They were fine with that so we're set.

So didn't answer the original questions, but worked through the problem at least for us. I'll report back as we progress, particularly if we run into problems. Thanks again.

currinh said:

Didn't hear a definitive answer about taxes using an address outside ones domicile state. It seems one can use an out of state address, but it may cause tax problems.

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IMHO you are over-working this issue.  If you are asked to provide a physical address other than your PMB, that address has no impact on your accounts!!!  For the one credit card company in 8 years that asked us for such an additional address, they were very quick to tell us that this new address will have no impact on the account other than being recorded in their files.  It didn't change the mailing address or the physical address for the account.  All it is is an address that complies with the Patriot Act as a place where people ought to know where you are.  I don't know why you think there will be tax implications; this address isn't going to show anywhere except on an obscure form filed on a computer.  It's not going to show on your 1099's or anywhere else.

This is not a new issue.  There were dozens of similar threads several years ago when the Patriot Act was first being implemented and lots of full-timers got all bent out of shape about it.  In the long run, it was a tempest in a teapot with little impact on most people.

Hello Fulltimers

I have some questions, but need answers from those who fit the following requirements:

1.  You live full time in your RV, and South Dakota is your legal state of residence.

2.  You use a South Dakota mail forwarding service, and that address is used on your driver's license, your vehicle registration, your federal taxes, and other administrative items.

3.  You do not own a S&B structure in South Dakota or any other state, and therefore use your mailing address in South Dakota as your physical address.  You may also have a "contact address" of a relative or friend that is a S&B structure address, but which is NOT an address for receiving mail.

If you meet the above requirements, my question is this. Do any of your have accounts with Schwab Investments, or with Schwab Bank?

I guess one could substitute the states of Texas, Florida, and Nevada in the above requirements as well.  I would still be interested in whether or not you have accounts with Schwab financial institutions.

Although I researched this with Schwab over a year ago, it appears that now I may be in trouble.  I think I must add that I am not "over-thinking" this.  I'm fairly certain I know what my issues are, and what information I need to resolve them going forward.

Thanks in advance,
Linda

Dreamsend said:

Although I researched this with Schwab over a year ago, it appears that now I may be in trouble.

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Linda:

What problem/trouble are you running into?

Hugh

We've made great progress in moving towards Fulltiming. We sold our house June 18 and are now if South Dakota setting up domicile. We have drivers licenses so are now SD residents. Currently working on vehicle registration, wills/etc., social security and vehicle insurance.

Changing finances was pretty straight forward. We changed addresses on our banks, including opening a new account or two, without problems and now have checks with our new address. I changed addresses on our other accounts. The only one that required an address beyond our PMB was Capitol One. The others, including Vanguard, Discover & Visa took our PMB without comment.

Thanks for all the help. Life is good so far.

Sounds like excellent progress! Thanks for the report.