Domicile/Tax Question

[Hugh Currin]

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, may 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 stating 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.

Hugh

[2gypsies]

We've used Fidelity, Vanguard, Wells Fargo, Bank of American with our Escapees mail forwarding address, Texas.

[redcrzr]

We domicile in SD with mydakotapost in Sioux Falls.  Never had a issue with Fidelity, local WI Bank or anything else.  I would expect you to experience the same wherever you choose to use a mail forwarding service.

Todd

[Kirk W]

Welcome to the Escapee forums! 

There is really nothing that requires you to move your financial institution to SD, but it could help if your domicile should ever be challenged and while some companies do still have problems with mail service addresses, well-informed ones do not. They may ask for an alternate address of a relative or someone who always knows how to contact you. 

4 hours ago, Hugh Currin said:

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?

Since you are a member of Escapees, I suggest that you call the office and ask for their help in dealing with Vanguard on the address issue as they have done this many times. 

[SWharton]

We use our Livingston address for all our financial institutions including Vanguard, Merrill Lynch and Morgan Stanley. No problems whatever.............

[Barbaraok]

We also have no problem with Vanguard and our Livingston address.  

[Hugh Currin]

Thank you all for the responses. It sounds like most have had no problem which is great to hear. I'm likely worrying for no reason. Won't know for sure till we change addresses, but signs are good.

Thank you again.

Hugh

 

[Hugh Currin]

6 hours ago, Kirk Wood said:

Welcome to the Escapee forums! 

There is really nothing that requires you to move your financial institution to SD, but it could help if your domicile should ever be challenged and while some companies do still have problems with mail service addresses, well-informed ones do not. They may ask for an alternate address of a relative or someone who always knows how to contact you. 

Since you are a member of Escapees, I suggest that you call the office and ask for their help in dealing with Vanguard on the address issue as they have done this many times. 

The banks and investments only need to be moved because the SD address will be the only one we have. Although we get very little paper mail from them that important note comes via USPS. If they will take a relatives address, and not confuse it with our domicile address, we'd be fine with that.

I'll give Escapees a call when we get closer.

Thank you.

Hugh

[SWharton]

I would get the PMB and start the process of moving everything to your new PMB now. It is surprising how many addresses need to be changed, even with a long check list we forgot a few.

[Second Chance]

3 hours ago, SWharton said:

I would get the PMB and start the process of moving everything to your new PMB now. It is surprising how many addresses need to be changed, even with a long check list we forgot a few.

X2^^. We got our Escapees mail service and address 4 - 5 months before hitting the road and started moving all our business to that address at that time (everything except local utilities for the house - which became a moot point upon selling the house). This allowed for a few billing and/or statement cycles so we had the requisite documentation (bank statements, Verizon phone bills, etc.) with our Livingston address before showing up in Livingston to register the vehicles and get our drivers' licenses (which took us all of one morning with everything else done!). As SWharton advised, I had made a spreadsheet with all the entities that needed an address change using everything from my contacts list in email to BillPay in my on-line banking account. I think the only one I missed on the first pass was a (very small) oil and gas lease from my late wife's estate that hadn't paid out anything in the previous year.

Rob

[Twotoes]

I use the Escapees mail forwarding address in TX for all my mail except my drivers liscense, registration and insurance which have the Escapees SD address for my SD domicile. I have had no problems using the TX address for my financial institutions. As far as taxes. You will only pay income tax on the amount of income earned in that particular state no matter what state you domicile in. If you domicile in SD and earn income in another state you will own tax in that other state. If you earn income in WI then WI will tax you no matter what your address is. 

[57becky]

We changed our domicile to SD in 2012, changed our mailing address to all our financial institutions, brokerage firms, etc, and never had an issue.  A few were cranky about using the address with the # sign for the box number, so APT or PMB also works, and that solved those issues.  We still bank with Wells Fargo, B of A, and others including our credit union which is only in California, and our stock investment companies, and in all that time we have had zero problems with any address issues.  We use Americas Mailbox, but I doubt you will have any problem with using any of the mail services.

[Hugh Currin]

Thank you all for your replies.

Didn't hear a definitive answer about using an address outside ones domicile state. 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 required.

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

I'll report back as we progress, particularly if we run into problems. Thanks again.

Hugh

[docj]

7 hours ago, Hugh Currin said:

Didn't hear a definitive answer about using an address outside ones domicile state.

Just to be very clear, we have been asked by exactly ONE credit card company with respect to wanting an address other than our SD PMB.  We gave that CC company our daughter's Maryland address and they were totally satisfied.  They didn't care whose address it was, all they wanted was an address they could use to fill in a blank on a form.  

IMHO, don't overwork that issue.  It's not as serious as you may think.  It's happened once to us in ~8 years of full-timing.

[Kirk W]

9 hours ago, Hugh Currin said:

if we are caught laundering money, a place to send the swat team. They were fine with that so we're set.

Now that is a friend!  

[Hugh Currin]

All's good for far. We closed on our house June 18. Quick trip to Canada for a trailer frame recall, back to Oregon to pick up a canopy for our new pickup, then to South Dakota. We're setting up domicile.

I changed addresses on all our accounts. For the most part this was no more than an online address change, and new checks. Only one asked for an address beyond our PMB. That was Capitol One for a credit card. The others (Vanguard, Discover, Visa, US Bank, Umpqua Bank) had no problem.

Just wanted to report back on the thread I started. Life is good.

Thanks.

Hugh

[RV_]

Welcome to the ranks Hugh!

[Kirk W]

On 7/7/2018 at 9:58 AM, Hugh Currin said:

Just wanted to report back on the thread I started.

Thanks for taking the time! Hope that your travels go as well or even better than ours.

[Dwain & Debbie]

we are now having trouble with our financial institution. they don't like our mail b0x company in sd. they have froze our accounts until we give them a different address for out sticks and brick , which we don't have. i called my daughter who works for fidelity  investments. she said some company's want a different address than an mail forwarding service. if i use my lot in az as a mail address will i be taxed in az for withdrawals at tax time? 

Edited February 2, 2019 by Dwain & Debbie

[Kirk W]

9 hours ago, Dwain & Debbie said:

if i use my lot in az as a mail address will i be taxed in az for withdrawals at tax time? 

I am quite sure that the address you give them will determine the tax status, but the only way to be sure is to talk to the account rep. The law does allow you to give them both a personal address that doesn't qualify and an alternate of a relative that does qualify. If you contact the Escapee offices they can probably help you or at least give you references to the law that should help. Your daughter's address could be a good alternative if you can get through to your account rep. Or you may need to change firms. 

[docj]

9 hours ago, Dwain & Debbie said:

i called my daughter who works for fidelity  investments. she said some company's want a different address than an mail forwarding service. if i use my lot in az as a mail address will i be taxed in az for withdrawals at tax time? 

The law allows financial institutions to ask for a physical address, in lieu of a mail forwarding service, but that address doesn't have to used on your account other than to meet Patriot Act requirements. 

We have exactly one financial institution which has insisted on an additional address and, at the time we were asked, we provided our daughter's.  That address didn't affect the billing or mailing addresses for the the account in question.

[Dwain & Debbie]

thanks for all the info.

[Twotoes]

Quote: The law allows financial institutions to ask for a physical address, in lieu of a mail forwarding service, but that address doesn't have to used on your account other than to meet Patriot Act requirements. 

The Patriot Act expired several years ago but many financial institutions still think they need a physical address. It is their internal policy not the law. 

[docj]

7 hours ago, Twotoes said:

The Patriot Act expired several years ago

Reauthorized in 2006 with additional updates in 2015.   https://www.history.com/topics/21st-century/patriot-act

It's my understanding that the concerns about this sort of thing got magnified by the "Know Your Customer" rules which the US’s Financial Crimes Enforcement Network (FinCEN) proposed in 2014.  Under KYC financial institutions are encouraged to do whatever they feel is appropriate to (a) identifying and verifying the identity of customers, (b) identifying and verifying the identity of “beneficial owners” of customers that are legal entities, (c) understanding the nature and purpose of customer relationships, and (d) conducting ongoing monitoring to maintain and update customer information and identify suspicious transactions. 

Although I doubt that anyone disagrees with the intent of KYC, apparently there is a lot of vagueness with respect to what banks and other institutions need to do to be compliant.  This results in inconsistencies between the policies of different institutions of the type we have discussed in this thread.  You can read more about this issue here: https://www.forbes.com/sites/forbestechcouncil/2018/10/11/kyc-and-aml-what-all-banks-need-to-know/

[whj469]

I would think that if you provide an address in AZ then you will be expected to pay state income tax there. I have heard that some states will want to tax you for the time that you spend in their state if it is for an extended period of time?