It's wise to be thinking ahead. In order to make the transition easier, do your research now. Every situation is different and what works for me, may not work for you. Establishing a domicile state should not be taken lightly. Tax consideration is but one small aspect. Health care is another. Medicare is easier in the bigger States than it is in smaller ones, but if you can get adequate care based on your health history, it may not matter. You need not own property in whatever state you choose.
We chose South Dakota based on our situation and it's advantages to us. California sales tax was 9 3/4% and SD was 3%. That alone saved us $39,690 when we purchased our coach. But, you must use caution when deciding which is best for you. Don't decide simply based on tax savings.
Since the home where you spend significant time per year is now mobile, you can choose any of the 50 States as your domicile state. The best way to avoid any future issues is to follow many of the guidelines set up by the IRS. They look at your "intent". Say you have friends/relatives in Ca. Your banking facilities are there, you're registered to vote there and you spend several months traveling up and down the coast. Most likely you would be considered a Ca resident. If you register your vehicles in SD/TX/Fla/Ore, you risk getting caught up in a tax mess eventually albeit a small risk. Decide on a domicile state and move EVERYTHING there...banking, driver's license, registration, voters registration, health insurance etc. etc. That way, you'll never have to be looking over your shoulder.
Briefly, here's what we found. This info is 7 yrs old so take that into consideration. As mentioned, RV friendly States are SD, Fla and Tx. SD has no income tax, 3, now 4%, sales tax, low registration fees and no vehicle inspections. Your license is good for 5 years but you must stay one night within their State to renew. DL renewal cannot be done online without a receipt showing the one night stay. Everything else can be done online. Texas requires a vehicle inspection every other year, which could be a hassle. Florida had too many issues for our situation to consider their State. The Montana LLC angle you asked about has been abused to such an extent IMO, it's not worth the hassle. It can be done legally, but because of the rampant abuse, many States look closely to ensure you have followed the rules completely. I don't need that kind of aggravation in my life at this age.
Things to look out for: Medical coverage, insurance coverage, tax advantages, ease of registration/DL renewal, cost of registering your vehicles, (watch out for hidden taxation) and insurance costs.
Speaking of insurance, there are only a few companies that offer full timer insurance. Sure you can 'cheat' the system and not fully disclose you're a full timer but do you want that to become an 'issue' when you need the coverage? Full timer insurance includes an extensive comprehensive rider similar to the homeowner's policy of a stix n brix home. Expect to pay about $1500-$2000/yr for coverage.
Everyone's situation is different. Use the above as a guideline and plug in your situation for each State, then choose the one that suits your needs the best. Once you've decided, you can then begin transferring all your stuff to your new State. We started 6 months before my retirement date so when I retired we were already residents of SD...7 years now and all is good....BOL...Dennis
We can do more than we think we can, but most do less than we think we doDennis and Debi Fourteen Years Full Timing
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