It was a beautiful day today with Colorado blue skies behind the bright green of new leaves on the trees. Our last day off started with a 2 hour trek along the newly reopened River Trail. The last hurricane recovery task for the public areas of the park. We will leave here two weeks from today, but that will be another post.
An oft asked question of us is "Why don't you change your state of residency to a state that doesn't have income tax?"
As a compulsive analyzer and retired banker it's a safe bet to assume I researched this thoroughly. My advise is simple. States that don't have state income tax generate revenue in many other ways, so do your research diligently before deciding. The first thing I did is pull out the last 3 years of state income tax returns and see what our state tax burden was.
Things to consider:
- Insurance rates - Property and Casualty as well as Health Insurance
- Speaking of health insurance research the state and their programs ACA has made things quite volatile.
- Do you use a credit union? If so what are their residence requirements to remain a member
- Will you visit that state each year?
- Vehicle licensing and inspection requirements
- Drivers License requirements
In the case of our Iowa home state, yes income taxes are somewhat higher than other states but..... We have a 30 year relationship with our credit union and were not willing to give that up. I love my insurance agent and don't want to have to go to an agentless relationship where we are simply a number. In the case of Texas the vehicle registration and inspection regs are expensive and somewhat ridiculous. Tags would have been very expensive and my favorite one of all; the toll roads here only charge tolls to vehicles with Texas plates. Out of state plates roll down the road toll-free! Plus you must have special training to be able to drive a motor home. I'm not sure if that is a DMV requirement or and insurance requirement. In Iowa a valid license is all that is required. In our case the dollars were a wash and we didn't want to give up the professional relationships that we enjoy with our loan officer and insurance agent. I researched South Dakota, Florida and Texas against Iowa.
Other states like South Dakota, who boasts an entire cottage industry around getting full timers to claim them as their home state, are attractive, but you still have to pay an expensive mail forwarding service to handle your mail and you have to show up once a year no matter what your travel plans are.
Have to go to the doctor? If you get seriously ill, you are headed to that state if you want your insurance to pay full benefits and give you the advantage of the lowest maximum out-of-pocket.
I'm not saying changing is bad, I'm just saying do your research thoroughly, get a quantifiable amount from your returns and do the research. Chances are, it will be a wash dollars wise, and add some unnecessary complications if you are true RV gypsies. Happy roaming!
Until tomorrow...
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