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Author Topic: Arizona Residency  (Read 7036 times)

Smoky

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Arizona Residency
« on: December 23, 2007, 01:50:42 PM »
I know this topic has been addressed in the past, but I would to take the chance to revisit it.

The Admiral and I have fallen in love with Arizona, and we have become very careful about residency requirements.  Frankly, it is becoming a chore for us to get the hell out of Dodge at the end of 6 months, not to mention declining all kinds of income opportunities.

All I can glean from past discussions is that Arizona is not a tax favored state.  But now we would lie to learn some specifics, especially if there is an RVer or two here that have already gone through the experience of moving to AZ with their RV from another state.

My first question is on the possible taxation or usage fee recovery,  Some states, like South Dakota, will charge you the difference between the sales or usage tax you might have paid on your RV when you purchased it, compared to their own tax rate.  That would be too expensive for us.  We paid 0% in Montana, and would then owe 3% of our purchase price to South Dakota.  And SD does not allow any depreciation on the tax base.  We would still owe it 20 years later.

Is there a comparable rule in Arizona?  Or is Arizona like Texas in that they consider an RV already purchased before moving into Arizona, to be already a done deal and they don't try to recover a piece of the money pie for themselves?

Assuming Arizona will not be interested in usage fees or sales tax, my next question is the MV registration fees.  I heard they are more expensive than any other state.  We pay about $400 a year in Montana.  What would we pay in Arizona for our RV and toad.

I also heard MV Insurance is very expensive.  We pay $1600 a year to Progressive with our Montana residence.  Will this go up or down in Arizona?

We then also heard that Arizona taxes you for social security payments.  Is this true?  Montana does not tax us for any of it, though I think there is a level if exceeded that they start taxing.

We know we would have to pay income tax on any work related salary we earn in AZ.  We have declined a lot of job opportunities because of that.  We even turned down payment for our karaoke show and do it gratis.  This could be a nice income producer for us, plus Sharon has a great background in retail sales, and I have a solid business background.  In fact, when we began fulltiming, I closed my consulting business and also a fishing charter business.  Neither of us want to get back into a full time job, but we get sometimes disgusted at some of the money thrown at us for doing some things we love to do.

Can anyone here help us sort out these factors?  Autos, RVs, insurance, social security, and income tax impacts if we officially move to Arizona and stay here g=for a greater part of the year?

As a side question, if we can't stay as long as we like, we are looking for other states where we could rent an RV lot on an annual basis for under $5,000 a year.  We would have to be allowed to set a shed on the lot.  It would be a big plus if the park had activities and amenities like pools, quilting room, activities rooms, etc.

In the end we may stay put in Pueblo, as we love it here, but its becoming increasingly difficult to limit our stay to half a year.
Smoky S  Ham radio - W3PY

The magic of a campfire
where the fish get bigger
the mountains get higher
the hike was uphill both ways
and new friends become old friends

2005 KSDP3910 Newmar Kountry Star
Toad - Taurus wagon w/ axle lock
On our way to the Poudre River in Colorado for the summer!

ava

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Re: Arizona Residency
« Reply #1 on: December 23, 2007, 05:45:45 PM »
I'm not sure I can answer your questions but I can throw some stuff into your
equation. I moved here (az) in 2001 from colorado, got a full time job and new
drivers license. However, I did not change the tags on my car. That car bit the
dust enginewise, and I purchased a cheap one to get me back and forth to
work. It was stolen, only insured liability so I was out a car and therefor had to
buy another cheap one which was also stolen. A friend of mine gave me an old
used van back in Colorado so I went up and got it, tagged it in Colorado and
have been driving it for 3 years on Colorado tags, and Colorado ins. I spent 145
on a 6 month policy for the van. If I had put it through the arizona inspection
arizona would have charged me the money for those three years of tags. I just
traded my van off for a new little suv and the insurance difference is incredible.
140 a month vs. 145 per 6 month. Arizona has a high auto theft rate so that
factor brings up the insurance rate. But I did shop around and found a cheaper
policy (66 a month) Arizona will try hard to get your money. Its considered a
right to work state and therefore lots of retirees have jobs but they also get
penalized on their soc sec if they work too many hours. I haven't figured that
one out yet but I'm working on understanding it. There are so many snowbirds
here in this community where I live in my fifth wheel and they all maintain their
out of state plates and leave during the heat of summer and come back for
winter. They have their sheds and just lock them up when they are gone.
Some of them even leave their extra car here while they return to their home
states. They pay their lots by the year. I'm a year rounder so I've seen the
folks come and go and lots of social functions too.
In case your looking for a place to settle, check out Roadrunner Lake resort.
They do have a website.
from the desert of Arizona
where the wind blows and the tumbleweeds roll
2000 Cameo fifthwheel
Ava
Gracie and Pixie
forever in my heart Bandit

Smoky

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Re: Arizona Residency
« Reply #2 on: December 23, 2007, 11:44:50 PM »
Thanks Ava for your helpful reply.

If we end up staying in AZ, we will stay right here in El Mirage, as we love our location.  We are one of those snowbirds you referred to.  We pay an annual fee and have a shed on our lot.  It is just that we would like to stay here longer than 6 months.  We have been told Arizona will conscript us into state citizens if we linger here longer than 6 months, whether we want to or not.  We did some research on the Arizona government web site, WHICH IS TERRIBLE TO UNDERSTAND AND SOME WEB PAGES LOST THEIR LINKS, but we did find some court case documents that show how tough Arizona is about forcing people to become state citizens and then charging them all kinds of back taxes.  It makes us wish we had never fallen in love with the state.

Some citizens tell us we are free loaders, but as far as I can tell we use very little state services.  We pay incredible sales taxes which certainly ought to cover our highway usage.  We live in a private park with its own security system that we pay for.  We sometimes visit a state park which we pay for.  We earn no income and get no worker benefits.  We spend most of our money here.  As far as I can see, Arizona seems intent on driving people like us out of the state, which is kind of sad.

However, we want to be law abiding citizens and we want to stay here 8 to10 months a year.  IF WE CAN AFFORD TO MAKE THIS KIND OF CHANGE!

So we are looking for some hard and fast answers.

Will we have to pay an original sales tax or use fee to re license our 40 foot motorcoach in AZ?  Same for our Ford Taurus auto?

Can anyone give us an estimate of insurance fees for Motor-coaches?  Maybe I can ask Progressive to estimate for us what the change would be?  Will insurance companies do this?

How does Arizona tax social security?

Shayne, of you are reading the mail, give me a buzz and tell me what you plan to be doing?



Smoky S  Ham radio - W3PY

The magic of a campfire
where the fish get bigger
the mountains get higher
the hike was uphill both ways
and new friends become old friends

2005 KSDP3910 Newmar Kountry Star
Toad - Taurus wagon w/ axle lock
On our way to the Poudre River in Colorado for the summer!

Alaskansnowbirds

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Re: Arizona Residency
« Reply #3 on: December 24, 2007, 12:23:08 AM »
How does Arizona tax social security?

Smoky,

The last time I checked (its been about 5 years) Arizona didn't tax social security income but they tax the hell out of everything else.

We're in the same boat as you are. Due to family matters we can't be gone six months out of the year. That is another reason we have the motor home up for sale. If we have to become residents of AZ I'd have to take a second mortgage on the house to get license plates for the motor home for one year. You pay according to what the state says the vehicle is worth. Not the Blue Book or NADA value. And that is just for the registration. I have no idea how much sales tax they would hit us for.

If it wasn't for family, I'd be out of here in a heart beat.
Don & Peg
Alaska/Arizona
Currently located here.
Weather at Camp Verde, AZ.

BernieD

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Re: Arizona Residency
« Reply #4 on: December 24, 2007, 07:28:28 AM »
Smoky

Yes, AZ taxes can be a bear but there are some ways around some of them. I believe you won't pay sales tax on registering the MH and GC if they have been out of state for 90 days. I know this is the case for new coaches, not sure about transferred coaches. The registration can be expensive, much more than MT's. It is based on the base sticker price of the vehicle when new less 15% each year. You are probably looking at about $1,500-2,000 on the coach, maybe less. If you call AZ MVD, you can probably get a good answer for both circumstances. Our 2001 XTerra was about $300 for a 2 year renewal last year. I think you will find vehicle insurance cheaper in AZ than MT.
Bernie & Marlene Dobrin
Home is Goodyear, AZ
Missing our Travel Supreme

Clay L

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Re: Arizona Residency
« Reply #5 on: December 24, 2007, 08:40:06 AM »
Regarding the SD 3% tax. Do I understand you think you have to pay 3% of the original cost of the RV?
If so that is not correct. You pay 3% of the current value.

Actually I only paid 1.8% of the current value when I became a resident of SD and I am not sure why it was so low.
I was a NH resident when I bought the motor home and they have no sales tax.
NH does get you big time when you buy plates each year - $1500 for mine the first year and over $1400 the second year. Maybe SD figured that was a form of tax or something.
Clay (WA5NMR), Lee (Wife), Katie & Kelli (cats)
Settled down after full timing for eleven years and snowbirding for one year in a 2004 Winnebago 35N Sightseer, Workhorse W 20 Chassis. Honda toad

Ron

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Re: Arizona Residency
« Reply #6 on: December 24, 2007, 08:48:49 AM »
When our son ans DIL moved from AZ to TX he was surprised how much cheaper it is to live in TX just because of less taxes.  No income tax, property taxes much less, car registration less, and car insurance less in TX.
Ron & Sam-home is where we park it. Currently located   HERE

Smoky

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Re: Arizona Residency
« Reply #7 on: December 24, 2007, 10:10:16 AM »
Well, I guess the next step is to pin down the DMV on registration costs.

I'd also like to hear from an AZ resident who is dealing with the social security tax treatment by AZ.

Maybe this year I will order the AZ Turbo Tax program in addition to Montana's and do a comparison run.

Smoky S  Ham radio - W3PY

The magic of a campfire
where the fish get bigger
the mountains get higher
the hike was uphill both ways
and new friends become old friends

2005 KSDP3910 Newmar Kountry Star
Toad - Taurus wagon w/ axle lock
On our way to the Poudre River in Colorado for the summer!

BernieD

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Re: Arizona Residency
« Reply #8 on: December 24, 2007, 01:14:23 PM »
Well, I guess the next step is to pin down the DMV on registration costs.

I'd also like to hear from an AZ resident who is dealing with the social security tax treatment by AZ.

Maybe this year I will order the AZ Turbo Tax program in addition to Montana's and do a comparison run.

Smoky

Just checked our tax return for last year and Social Security benefits were not taxed.
Bernie & Marlene Dobrin
Home is Goodyear, AZ
Missing our Travel Supreme

Pierat

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Re: Arizona Residency
« Reply #9 on: December 24, 2007, 02:15:53 PM »
Life's too short not to have fun when you can. It is too bad that you feel you must turn down good income because that income might be taxed here. Seems that you really like it here, so why not visit with a good CPA about your tax and residency questions. That person might have more reliable advice than the anecdotal information here, however good it may be. The CPA's fee might even be deductible on your new AZ resident income tax return (gasp!). Anyway, I sure agree that the sales taxes ought to be more than enough to cover whatever you might be using here. I've heard AZ is one of the highest for insurance costs, as well. You probably can get that info from your agent.

Contrarily, I've been an Arizonan for decades (native Illinois), but DW and I are planning to get outta here in late 2008 after buying an RV. We would love to be South Dakotans.

Sure hope this all works out to your satisfaction. AZ is a beautiful place (but I think it's getting too crowded and smoggy etc....).

PS for any who don't convert their plates to AZ after they start working here, I hear that, if you get caught, the fines are really hefty. Not worth it IMHO.
We Have Hung Up The Keys!
Washington State

BernieD

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Re: Arizona Residency
« Reply #10 on: December 24, 2007, 03:30:11 PM »

We know we would have to pay income tax on any work related salary we earn in AZ.  We have declined a lot of job opportunities because of that.  We even turned down payment for our karaoke show and do it gratis.  This could be a nice income producer for us, plus Sharon has a great background in retail sales, and I have a solid business background.  In fact, when we began fulltiming, I closed my consulting business and also a fishing charter business.  Neither of us want to get back into a full time job, but we get sometimes disgusted at some of the money thrown at us for doing some things we love to do.

Smoky

I don't understand your rationale. If you work, you have to pay federal tax on the earnings (you would have deductible expenses for your karaoke gigs) and AZ state tax. You still wind up with way more than 50% of your billings after tax. By the way, any tax you pay to AZ, including earnings and vehicle registration fees are deductible on your federal return.
Bernie & Marlene Dobrin
Home is Goodyear, AZ
Missing our Travel Supreme

Wendy

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Re: Arizona Residency
« Reply #11 on: December 24, 2007, 07:48:32 PM »
Smoky, you need to hire me as your personal tax accountant.

From the Arizona revenue code:
Arizona does not tax social security benefits received under
Title II of the Social Security Act. Arizona does not tax railroad
retirement benefits received from the Railroad Retirement
Board under the Railroad Retirement Act. If you included such
social security or railroad retirement benefits as income on your
federal return, use line C22 to subtract this income.


So, should your other income be high enough to make your social security taxable under the federal law, it will not be taxable by the state of Arizona. Earned income is an entirely different story.

Wendy
Wendy, Mike, and Gordon
~We can't be lost because we don't care where we're going~
Here's where we are http://map.datastormusers.com/user2.cfm?user=2276
2004 Winnebago Sightseer
1973 Sunshine Yellow VW Bug

Alaskansnowbirds

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Re: Arizona Residency
« Reply #12 on: December 24, 2007, 11:32:22 PM »
And if you have EARNED INCOME in the state of Arizona, IIRC by state law you have 30 days to register your vehicles and get an Arizona drivers license.

Last year MVD was out at Palo Verde power plant and was ticketing workers that had been here more than 30 days. They were residents of other states and the company they worked for sent them here to do a job then they were leaving.
Don & Peg
Alaska/Arizona
Currently located here.
Weather at Camp Verde, AZ.

Smoky

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Re: Arizona Residency
« Reply #13 on: December 27, 2007, 12:59:37 AM »
Bernie and
Wendy:

I think you guys misunderstood my concerns.  I have no problem paying tax on earned income.  I'd be an idiot to think I would not have to pay that.

My concern is that Arizona is a state that requires you to be a citizen of the state if you work there or if you stay there over 7 months.

Snowbird, are you actually going to live in SD or just use it as an address?


Smoky S  Ham radio - W3PY

The magic of a campfire
where the fish get bigger
the mountains get higher
the hike was uphill both ways
and new friends become old friends

2005 KSDP3910 Newmar Kountry Star
Toad - Taurus wagon w/ axle lock
On our way to the Poudre River in Colorado for the summer!

Jim Dick

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Re: Arizona Residency
« Reply #14 on: December 27, 2007, 06:58:03 AM »
Smoky,

Many, if not all, states require you to become a resident if you stay there more than six months. I have a summer job in CT and do not work more than six months so I don't have to become a resident again. They also tax me on my income because they have the personal income tax. Not only that but they base it on my federal income tax statement!!! It's a huge ripoff but one cannot get around it.

Jim

Titusville, Florida
U.S. Navy Veteran
2000 American Dream 40' DP
2012 GMC Terrain
2006 Suzuki Boulevard C50T Motorcycle
http://photo.net/photos/jimdick

BernieD

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Re: Arizona Residency
« Reply #15 on: December 27, 2007, 09:37:11 AM »


I think you guys misunderstood my concerns.  I have no problem paying tax on earned income.  I'd be an idiot to think I would not have to pay that.

My concern is that Arizona is a state that requires you to be a citizen of the state if you work there or if you stay there over 7 months.

Smoky

Well you sure have me confused. As you understand, if you work in any state you will be required to pay federal tax on the earnings. I don't understand why you are singling out AZ to not to work because of income tax issues. The AZ tax rate is relatively low with some high deductions so your ultimate tax payable to AZ could be minimal to nil. Are there other issues besides income taxes that keep you from enjoying our state for a longer period?
Bernie & Marlene Dobrin
Home is Goodyear, AZ
Missing our Travel Supreme

Wendy

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Re: Arizona Residency
« Reply #16 on: December 27, 2007, 10:44:19 AM »
Bernie and
Wendy:

I think you guys misunderstood my concerns.  I have no problem paying tax on earned income.  I'd be an idiot to think I would not have to pay that.

Smoky,

In your original post you asked "How does Arizona tax social security?" I answered that question, or at least I thought I did. The answer is that Arizona does not tax social security.

Wendy
Wendy, Mike, and Gordon
~We can't be lost because we don't care where we're going~
Here's where we are http://map.datastormusers.com/user2.cfm?user=2276
2004 Winnebago Sightseer
1973 Sunshine Yellow VW Bug

Smoky

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Re: Arizona Residency
« Reply #17 on: December 29, 2007, 07:32:51 PM »
Yes indeed you did Wendy!  Thanks again!
Smoky S  Ham radio - W3PY

The magic of a campfire
where the fish get bigger
the mountains get higher
the hike was uphill both ways
and new friends become old friends

2005 KSDP3910 Newmar Kountry Star
Toad - Taurus wagon w/ axle lock
On our way to the Poudre River in Colorado for the summer!

Smoky

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Re: Arizona Residency
« Reply #18 on: December 29, 2007, 07:35:34 PM »
Bernie:

I still have a number of unclear issues.  the biggest one being that I don't want to have to fork over a $25K use tax or sales tax fee.  The AZ govt web site has a broken link on the page that could possibly answer that question.

Smoky S  Ham radio - W3PY

The magic of a campfire
where the fish get bigger
the mountains get higher
the hike was uphill both ways
and new friends become old friends

2005 KSDP3910 Newmar Kountry Star
Toad - Taurus wagon w/ axle lock
On our way to the Poudre River in Colorado for the summer!

BernieD

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Re: Arizona Residency
« Reply #19 on: December 29, 2007, 07:45:13 PM »

I still have a number of unclear issues.  the biggest one being that I don't want to have to fork over a $25K use tax or sales tax fee.  The AZ govt web site has a broken link on the page that could possibly answer that question.

Smoky

I would suggest you call AZ DMV, but we bought our first coach out of AZ with NY driver's license. Registered it in AZ without sales tax.
Bernie & Marlene Dobrin
Home is Goodyear, AZ
Missing our Travel Supreme