Keeping a US Home Base

[GinBoy2]

This issue has cropped up several times recently, so I thought I'd start a separate thread.

Many US expats face the issue of how to maintain a US base, without incurring the wrath, and tax of your home state.

I will describe my experience.

As a Californian, I was always concerned about the fact that I still had a DL vehicles registered, and well as being on the electoral register. California along with several other States is one that doesn't like to let you go, and if they decide you still have links to the State, yet don't file State taxes, it can be an issue, especially if at some point in the future you return.

After some research South Dakota was a clear winner as a place to 'move'. It's has zero state tax and a very liberal requirement for what constitutes as a resident, basically 1 night stay every 5 years. It's the #1 choice for the RV'ers who traverse the country full time.

First step is to find a company that provides you with a PMB address, that's what qualifies you as a resident.

I chose Americas Mailbox in Rapid City. There are others, but most just cater to the RV community not expats. My conversation with another company went something like this..."Do you provide services for expats as well as RV'ers?...What's an expat?" That ended that discussion pretty quickly!

So what happens after you have set up your account?

I'm assuming that most want to maintain a DL, maybe have vehicles and want to vote.

You start with two documents. One is the receipt from the hotel the second being the 'contract' from the forwarding company you use. Now you need to be a little careful since DMV are quite specific about what they need, Americas Mailbox actually have guest rooms which makes the process easy, since they know exactly what to provide.

DMV; OMG, what joy that is. Seriously you walk into DMV in Rapid City with your existing license, SSN card (original) passport and the two documents previously described.

Within 30 minutes you walk out of DMV with your spanky new South Dakota license in your hand.

You also register to vote at DMV, although you will have to apply for an absentee ballot, that process I described in another pinned thread.

Car registrations, curiously aren't handled by DMV, but the county treasury department. So after obtaining your new license you head to the treasurers office with you new license and the title document for you vehicle, 15 minutes later and you walk out with the license plate and tags in your hand. My daughter who lives in San Diego has my car, and after re-registering have done online renewals every year

I have just completed my first DL renewal so going into my second 5 years, and I think this was one of the best decisions, as a retired expat I have made

Hopefully this is some useful info

Edited May 22, 2016 by GinBoy2

[skatewash]

I'm interested in doing a similar thing but in Florida. I've been told that in Florida it's possible to renew your driver's license online, but only one time. The next time you would have to do it in person. Sounds like from what you've written that South Dakota requires you to do the renewal of your driver's license in person every five years. I'll be surprised if Florida lets me do it online, but I guess I'll find out when the time comes. If anyone has any experience renewing their Florida driver's license online I'd be very interested to hear about it.

[gk10002000]

I am a Florida resident but I frequently work out of state and am away from Florida for extended periods of time, arguably an Inside the USA Florida expat! Florida online renewal is fine except in recent years Florida is one of the states that is complying with the Real ID act forced out by the TSA. So when you get a first time new license or apply for a renewal of your license if the original license was NOT real ID compliant then you have to show up at the DMV in person. You have to bring ID, proof of citizenship, and recent recent within 30 days copies of two bIlls showing your current address (cell phone, cable, rent, utilities, newspaper, whatever. I don't recall if they cared what type of bill it was. I really do maintain my residence in Florida and pay rent in a house whose room I sub rent so the bill documents/online printouts were not an issue. On your Florida license you get a little gold star. Gold star has bad historical connotations due to some WW 2 actions against certain ethnic groups, but that is still the marking Florida chose. In the future, as far as I know, I will be able to renew my Gold Star license online at least once anyway

[skatewash]

I am a Florida resident but I frequently work out of state and am away from Florida for extended periods of time, arguably an Inside the USA Florida expat! Florida online renewal is fine except in recent years Florida is one of the states that is complying with the Real ID act forced out by the TSA. So when you get a first time new license or apply for a renewal of your license if the original license was NOT real ID compliant then you have to show up at the DMV in person. You have to bring ID, proof of citizenship, and recent recent within 30 days copies of two bIlls showing your current address (cell phone, cable, rent, utilities, newspaper, whatever. I don't recall if they cared what type of bill it was. I really do maintain my residence in Florida and pay rent in a house whose room I sub rent so the bill documents/online printouts were not an issue. On your Florida license you get a little gold star. Gold star has bad historical connotations due to some WW 2 actions against certain ethnic groups, but that is still the marking Florida chose. In the future, as far as I know, I will be able to renew my Gold Star license online at least once anyway

Thanks for the confirmation. I do believe my Florida license is Real ID compliant as it was obtained (not easily) in 2012 when I lived there. My understanding is that Florida began issuing Real ID compliant drivers licenses January 1, 2010. I will check to make sure I have the Gold Star on my license as you suggest.

[gk10002000]

I am a Florida resident but I frequently work out of state and am away from Florida for extended periods of time, arguably an Inside the USA Florida expat! Florida online renewal is fine except in recent years Florida is one of the states that is complying with the Real ID act forced out by the TSA. So when you get a first time new license or apply for a renewal of your license if the original license was NOT real ID compliant then you have to show up at the DMV in person. You have to bring ID, proof of citizenship, and recent recent within 30 days copies of two bIlls showing your current address (cell phone, cable, rent, utilities, newspaper, whatever. I don't recall if they cared what type of bill it was. I really do maintain my residence in Florida and pay rent in a house whose room I sub rent so the bill documents/online printouts were not an issue. On your Florida license you get a little gold star. Gold star has bad historical connotations due to some WW 2 actions against certain ethnic groups, but that is still the marking Florida chose. In the future, as far as I know, I will be able to renew my Gold Star license online at least once anyway

Thanks for the confirmation. I do believe my Florida license is Real ID compliant as it was obtained (not easily) in 2012 when I lived there. My understanding is that Florida began issuing Real ID compliant drivers licenses January 1, 2010. I will check to make sure I have the Gold Star on my license as you suggest.

I also just recently changed my Florida address from Palm Beach to Jupiter. I did that online and they mailed my driver license to my new place in Florida. It looks like you could have them mail it somewhere else. I got my "Gold Star" Driver License in March 2012.

[matta330]

For now I am also keeping my Oregon residency. I previously had a UPS store box for my business which I still use as my American address.

[NancyL]

It's a good idea when selecting a mail forwarding service to find one that will ship items via US Postal Service and not just FedEx/DHL/UPS. Somehow good that arrive via the Thai postal system manage to escape customs scrutiny and that seems to be the only avenue to bring in vitamins and nutritional supplements. .

No problem shipping regular mail, magazines, printed material via DHL/FedEx/UPS but there sure is with anything else.

[Jingthing]

So, South Dakota isn't compliant with the real I.D. standards? I can't see how they could be if you can get a license with a hotel room receipt! If not, how long can that last?

[JLCrab]

In Florida: "St. Brendan's Isle was founded in 1988 to provide mail forwarding services to live aboard cruisers from around the world."

https://www.sbimailservice.com/index.html

[GinBoy2]

So, South Dakota isn't compliant with the real I.D. standards? I can't see how they could be if you can get a license with a hotel room receipt! If not, how long can that last?

South Dakota is compliant, as indicated by the gold star on D/L

[Langsuan Man]

Correct, according to this graphic SD is compliant, sorry but I lost the reference where I found this

[Freakin Musashi]

Thank you for the advice. As an owner of a property in California that will soon increase in value, I am loathe to bid adieu to my sunshine state. I guess Jerry still has his hooks in me.

[GinBoy2]

Thank you for the advice. As an owner of a property in California that will soon increase in value, I am loathe to bid adieu to my sunshine state. I guess Jerry still has his hooks in me.

You really do have a tangible asset in California.

The problem arises for those that really don't have a house there, but maybe still have a drivers license, or are registered to vote there. California is pretty aggressive when it comes to determining what qualifies as a resident, and hence state tax.

I think we all figure that filing taxes with the Feds is a must...at the end of the day need a passport, but the State is a little more fluid especially if you don't actually live there.

That's where dissociating yourself is a good insurance policy, especially if you ever end up returning, since at that point Sacramento may well ask you to file for all those 'missing' years

[bendejo]

I used Earth Class Mail and lived abroad for years, all that time on assorted tourist visas; St. Brendan's Isle was my 2nd choice. I never applied for any other sort of visa or residency status, so there is no ambiguity as to foreign residency etc. I file my US federal returns every year.

ECM is based in Seattle but has a series of addresses throughout the US, should you want to establish a presence in a particular state. There is a way to check if an address is actually a known mailbox service, I've had banks tell me they that my ECM address was not a residence. My guess is this list is kept by DHS or USPS.

Should anyone care to know, someone looked into which state has the longest period before a dl expires and he came up with Arizona. (this was a few ago)

[skatewash]

I used Earth Class Mail and lived abroad for years, all that time on assorted tourist visas; St. Brendan's Isle was my 2nd choice. I never applied for any other sort of visa or residency status, so there is no ambiguity as to foreign residency etc. I file my US federal returns every year.

ECM is based in Seattle but has a series of addresses throughout the US, should you want to establish a presence in a particular state. There is a way to check if an address is actually a known mailbox service, I've had banks tell me they that my ECM address was not a residence. My guess is this list is kept by DHS or USPS.

Should anyone care to know, someone looked into which state has the longest period before a dl expires and he came up with Arizona. (this was a few ago)

When you use a Commercial Mail Receiving Agency (CMRA) as your address and you wish to have mail delivered to that address by the US Postal Service you first have to file Form 1583: Application for Delivery of Mail Through Agent. That information is kept in a database by the USPS and is available to "to financial entities regarding financial transaction issues" and "...for the purpose of identifying an address as an address of an agent who receives mail on behalf of other persons" (https://about.usps.com/forms/ps1583.pdf).

Arizona has the longest validity period for driver's licenses in the US. Your license is valid in AZ until you reach age 65. However, you are requested to visit the DMV in person every 12 years to update the photo and take a vision test. After 65 the validity is only 5 years. Interestingly, it sounds like the penalties for not updating your license every 12 years are not that severe: "Failure to comply with this request may result in disqualification for certain driver license services, including online services, such as duplicate replacements for lost or damaged licenses."-- https://www.azdot.gov/mvd/faq/driver-services/license-information

Driver's license validity periods for other states are available here: https://en.wikipedia.org/wiki/Driver%27s_license_in_the_United_States#Licenses_for_adults_and_minors.3B_GDL_laws

[MajarTheLion]

Thank you for the advice. As an owner of a property in California that will soon increase in value, I am loathe to bid adieu to my sunshine state. I guess Jerry still has his hooks in me.

I live in another stat. But for the sake of argument, would that strategy work if we only own acreage in California? Or does it need to be a residence?

Edited June 11, 2016 by MajarTheLion

[GinBoy2]

It's a tricky subject as to what constitutes a residence.

The State may be OK with a mail forwarder, a bank may not.

For example; Chase is fine with me using my South Dakota PMB address as the primary. Bank of America is not, and I use daughters physical address as the primary and the SD PMB as the mailing address.

[Freakin Musashi]

At this point the difference between my mortgage and potential rent is about $1000, and that may not make it worthwhile to hang onto the place. However, in a few years, my net from a sale should be close to a $1/2 mil.

I'm wondering if I would really need a US address in any case? Suppose I didn't want to vote for instance. Would I need a US mailing address (real or fake) to retain my citizenship and passport?

Thanks for creating this thread, BTW.

[taxout]

Certainly no need for a U.S. mailing address to keep your passport and citizenship!

But having a U.S. driver's license, credit card, bank account and securities account makes life so much easier, and you'll need a US address for those.

(Without a U.S. address, you can nonetheless vote in Federal elections on the basis of your last U.S. address by filing a form as a Special Federal Voter; it won't affect your state income tax status.)

Edited June 22, 2016 by taxout

[skatewash]

At this point the difference between my mortgage and potential rent is about $1000, and that may not make it worthwhile to hang onto the place. However, in a few years, my net from a sale should be close to a $1/2 mil.

I'm wondering if I would really need a US address in any case? Suppose I didn't want to vote for instance. Would I need a US mailing address (real or fake) to retain my citizenship and passport?

Thanks for creating this thread, BTW.

You don't need a US mailing address to retain your citizenship, passport, or even the right to vote. You can continue to vote where you were last registered, and if you continue to do so that should extend your registration. How the voting thing works is very dependent on your locality (county) where you vote. In my Florida county I receive my absentee ballot by email and fax it back to them. This year they are making the ballot available online. Some localities are much less sophisticated or accommodating for those who live overseas. You should contact your county's Supervisor of Elections to find out what arrangements are available to you (information is usually available online but again depends on the county involved).

However, you do really need a US mailing address if you want to continue to have accounts in US based financial institutions. I am assuming you're a US citizen who would like to live overseas. It can be exceedingly difficult bordering on the impossible to open or maintain an account in a US financial institution (bank, brokerage, credit union, etc.) without a US mailing address. But you don't have to own property to have a US mailing address. Many Commercial Mail Receiving Agencies (CMRAs) exist that will rent you a US mailing address. Or you can use a friend or family member's residential address. Having a permanent US mailing address is something you want to line up while you are still in the US. Likewise, if you want to open any US financial institution accounts you should do so while you are in the US. Doing so once you are overseas is more difficult. Suggest you look into opening a banking/brokerage account with Charles Schwab while you are still in the US as that sort of account will allow you to withdraw money from ATMs worldwide and get reimbursed for any ATM fees incurred. You may also wish to obtain a credit card that will not charge you foreign transaction fees when used overseas. CaptialOne is among one of the companies that offer such cards. If you are nearing the end of your driver's license validity it may be possible to renew it early, etc. Obviously, I don't know your particular situation, but these are general things that should be considered before moving overseas.

Finally, there are state income tax considerations when moving overseas. It's best if you can to establish residency in one of the US states without a state income tax. If you do so then filing a state income tax return is not something you will need to worry about. A state's policy regarding whether you need to file a state income tax return or not depends on the particular state involved and your ongoing ties to the state. Whether you own real estate in the state, etc. That's something best looked into for your particular state.

[CaptHaddock]

(Without a U.S. address, you can nonetheless vote in Federal elections on the basis of your last U.S. address by filing a form as a Special Federal Voter; it won't affect your state income tax status.)

Not true. States can and do take your voting status into account when determining your tax domicile. Depending on the state and the other factors in your case, voting may indeed result in your getting a tax bill. As in all cases of tax domicile issues, it matters a lot which is the state is in question.

[Crowes]

I'll never understand the mentality behind Californians and others that set up laws that hamper their future plans or freedom, and then just jump ship to another state where things are better off. What happened to all that time you were living there and supported the political winds of the state? Now you bail? This isn't meant to be a personal shot at you OP, I just see this all the time and it's mainly Californians or New Yorkers sick of the environment they created. Off my soap box, carry on.

Edited June 23, 2016 by Crowes

[taxout]

Yes, it is true.

"Voting for candidates for federal offices does not affect your federal or state tax liability. Voting for candidates for state or local offices could affect your state tax liability."

https://travel.state.gov/content/passports/en/abroad/legal-matters/benefits/voting.html

Note I said "vote in Federal elections above. The point of the law is to encourage overseas citizens to vote in Federal elections without having to worry about it triggering state income tax problems. But you do have to be careful to register as a Federal-only voter.

[CaptHaddock]

Yes, it is true.

"Voting for candidates for federal offices does not affect your federal or state tax liability. Voting for candidates for state or local offices could affect your state tax liability."

https://travel.state.gov/content/passports/en/abroad/legal-matters/benefits/voting.html

Note I said "vote in Federal elections above. The point of the law is to encourage overseas citizens to vote in Federal elections without having to worry about it triggering state income tax problems. But you do have to be careful to register as a Federal-only voter.

So says the State Department. The link does not reference any federal law preventing a state from considering your voting in the state in a federal election as establishing or supporting tax domicile for that state. Seems like a pretty flimsy protection to me.

Below, as just one example, is a clip from the Maine state govt warning you that they will tax you if you vote in Maine without mentioning any limitation based on voting only for federal offices. So if the state of Maine were to send you a tax bill would you reply with a link to the State Department? In my opinion it's just too risky to be worthwhile, but then I am from solid-blue NY state where my vote would not matter. Some states, like CA and VA, are notorious for being aggressive in going after taxes from expats.

Consequences of Declaring Your Voting Residence (by Registering to Vote) in Maine

You should be aware that if you register to vote in Maine, you will be deemed to have declared residency in Maine, which may have consequences for compliance with other Maine laws, including the motor vehicle laws and tax laws. If you drive a car in Maine, you are required to obtain a Maine driver’s license within thirty days of establishing residency here. Driving without a Maine license more than ninety days after you have established residency in the state is a crime under Maine law. If you are a resident of Maine and own a vehicle here, state law also requires you to register that vehicle in Maine within thirty days of establishing residency. By declaring Maine as your voting residence, you may be treated as a resident of Maine for income tax purposes and be subject to Maine income tax.

http://www.maine.gov/sos/cec/elec/voter-info/resident.html

[taxout]

There is indeed Federal law protecting you from State taxation solely because you vote for Federal candidates as a Special Federal Voter. But if you think the State Department is talking out its hat, I'll just leave you to your misunderstanding. Seriously research this and you'll find that's the way it is.

[CaptHaddock]

There is indeed Federal law protecting you from State taxation solely because you vote for Federal candidates as a Special Federal Voter. But if you think the State Department is talking out its hat, I'll just leave you to your misunderstanding. Seriously research this and you'll find that's the way it is.

Could you cite the relevant law?

[taxout]

I'll stand by my statement. Search for it if you don't believe me, or the State Department. Or call the embassy if you have real doubts.

Or, if you know how dissect a statute, follow this:

https://www.law.cornell.edu/uscode/text/42/1973ff-5

Edited June 23, 2016 by taxout

[CaptHaddock]

It may be as you claim, but it's not clear from the link which does not specify voting for federal office as among the rights "under this subchapter." I am not familiar with reading the U.S. Code. So you may well have the right to vote in a federal election without maintaining tax domicile in your former state of residence. As long as you are willing to hire a lawyer to assert that right the face of a tax domicile audit from the state taxing authority, some of which are known to be aggressive, then perhaps you'll be fine.

It wouldn't be worth the risk to me however.

[taxout]

Hire a lawyer if you don't know how to read a statute. That's how they're written, with cross-references you have to know how to follow. You can't expect anyone here to write you a formal legal memorandum parsing it.

But the law is as I've stated it.

[CaptHaddock]

Hire a lawyer if you don't know how to read a statute. That's how they're written, with cross-references you have to know how to follow. You can't expect anyone here to write you a formal legal memorandum parsing it.

But the law is as I've stated it.

Right, but hiring a lawyer is exactly what I don't want to do.