Nomad merchandise for sale at DakotaPost

South Dakota Residency for Nomads 🏕️

If you’re American and you’re moving overseas or you travel often enough to be considered a nomad, becoming a South Dakotan is a fantastic way to save money and hassle. I did it myself, and here I’ll share everything I learned in the process.

Why South Dakota?

SD is unique among the 50 US states in having passed laws specifically intended to make it easier for nomads and long-term travelers to become residents. It’s thus easy to benefit while traveling from their lack of state income taxes and other advantages for people without a permanent location. This is an important service for people who genuinely don’t have any long-term home, at least in the US.

With just one night in a hotel or campground in the state (and a receipt to prove it), along with a local mail forwarding service, you can pick up a new SD driver’s license on the spot. If you want to register to vote and register your vehicle, those are easy too.

This is different from the other states without an income tax like Alaska, Florida, Texas, and Washington, because all other states require you to maintain a residential address there and expect you to live there for a while to establish residence. SD requires just one night in the state every five years in order to renew your driver’s license in person and doesn’t require a residential address.

For me, the benefit of this is not having to rely on a friend or family member in one of the other states without an income tax to let me use their address on an ongoing basis, and going through the hassle of falsely demonstrating that I live there by putting utilities in my name or the like. Or spending enough time and rent in a state to do that without a friend, then bending the law by not maintaining the address I set up and not keeping my driver’s license up to date.

If you’re already living in a state without income tax and are planning to start long-term travel, I suppose you could just continue using your last address on government forms. But USPS mail forwarding only works for a year, and only within the US. And even then, as mentioned above that would be bending the law since you’re supposed to keep your driver’s license and government forms up to date with your current address.

Thus, South Dakota not only has no income taxes but also eliminates the hassle of being homeless/nomadic and out of state all the time. There are other benefits for RVers. For instance, SD does not require annual inspections, so you don’t have to drive back to the state once a year.

Tax & Vehicle Benefits

Above, I’ve tried to emphasize the value of SD residency for nomads, which is not just about the tax benefits. But here are the tax and vehicle cost benefits of being a South Dakota resident:

  • No state income tax, including for earned income, pensions, dividends, interest, capital gains, etc.
  • No property tax.
  • No inheritance tax.
  • Low tax on vehicle purchases, and it’s applied only on the trade difference of a vehicle.
  • Low vehicle registration fees.
  • No annual vehicle inspections.
  • Low vehicle insurance rates. (Edit 2021-11-29: See the comments below for a discussion of challenges with getting non-RV autos insured using only an SD mailing address.)

If you’re moving from a high-income tax state, they may try to keep taxing you for as long as they can, especially if they think you’re moving for tax avoidance. California and New York are the most notorious for their aggressive approaches to taxing people who’ve left if they think you’re still domiciled in their state or that you’re really leaving only for tax avoidance. If you’re moving from one of those states, you should probably consult a tax attorney. It might make sense to spend a year (and pay your taxes once) in a state other than South Dakota, before establishing residency there.

When leaving CA or NY, it’s especially important to document your departure and set up connections in your new home state (e.g., getting a new driver’s license, re-registering any vehicles, registering to vote, joining professional organizations, purchasing a home, etc.).

If this is a major concern for you (e.g., if you’re a high-income earner, or you expect to retain ties to your former state), check out this site that describes how states typically determine residency, and this document that gives some example court cases decided for and against people who were pursued for taxes after they tried to move their domicile out of NY.

What You’ll Need to Bring

Transferring your driver’s license to SD and establishing residency is incredibly simple and takes only a few minutes. You’ll need the following:

  1. Your current driver’s license to trade in.
  2. Another form of identification. I brought my passport.
  3. Proof of your social security number, such as your social security card or last W-2.
  4. A receipt for your ownership of a mail forwarding address within the state.
  5. A hotel receipt for at least one night’s stay in SD. Important: The address on your receipt should be your mail forwarding address in SD, or alternatively it should have no address listed for you at all. (I haven’t seen these details anywhere else online; I learned them by getting this wrong and initially giving the Sioux Falls DMV a hotel receipt that used a different address. After having my receipt rejected, I was able to go back to the hotel and have them print a new receipt with an updated address.)

If you’re doing this in Sioux Falls (where I did — it’s the state’s largest city), it’s fine to budget only one day in town for this. Just make sure to arrive the night before, so you can get that receipt you’ll need from your hotel.

Here are SD’s official requirements: Required Driver License & ID Card Documents: Full-Time Travelers. That page mentions a “residency affidavit” which wasn’t in my list above. That’s because they gave me a copy at the DMV, so I didn’t need to bring one in.

Note that South Dakota doesn’t actually have a Department of Motor Vehicles (DMV). They issue drivers’ licenses from their Department of Public Safety (DPS). I’ll continue calling it the DMV in this post though since that’s a more familiar term for most people.

Additional Tips

Stay in a hotel near the Sioux Falls DMV. Motel 6 is a 15-minute walk and is the cheapest night’s sleep in the city unless you want to stay at a campground. Sleep Inn Airport is even closer, on the same block as the DMV. Both are also close to Sioux Falls Regional Airport, so staying at one of these places will save on rides to and from the airport. But more importantly, staying close to the DMV will help if you run into any problems. I had to go back to the DMV a couple of extra times while there and ended up Ubering back and forth from my hotel each time.

I used DakotaPost for the forwarding address requirement. I recommend them because they have a nice physical location in Sioux Falls where you can walk in and sign up on the spot, with no need for getting a USPS authorization form notarized like you would be required to if signing up with other services online. Although DakotaPost’s website pushes their more expensive virtual mailbox service that allows you to see your mail online, they also do simple mail forwarding starting at $155/year.

I actually tried another service first, called Traveling Mailbox. They’re fantastic and possibly the best deal (given my needs) for this kind of remote mailbox service. I already had a North Carolina address with them, and signed up for a second address in SD, expecting to cancel the first account after becoming an SD resident. Well, I’m glad I didn’t cancel it beforehand because the SD DMV rejected my Traveling Mailbox address due to a legal requirement about them maintaining a physical presence in the state. The helpful woman I spoke to at the Sioux Falls DMV recommended a couple of alternative companies that always gave her the paperwork she needed on the first try: DakotaPost and Your Best Address. She preferred DakotaPost.

Edit (2021-05-19): A reader who switched to South Dakota residency based on this post wrote me to mention he used South Dakota Residency Center for mail forwarding since they’re cheaper ($110/year).

24 thoughts on “South Dakota Residency for Nomads 🏕️”

  1. Hi, thanks for this information. I am reading through SD’s requirements for “New Applicants and Transfers Out of State” here: https://dps.sd.gov/driver-licensing/required-documents

    It says for these individuals that “All applicants are required to provide two documents proving your residential/physical address.” Does this not apply?

    I do see something on another page about full-time travelers only needing to prove ownership of the PMB, but this seems to only apply to renewals and replacements. Is this situation then also applicable to nomads as new applicants?

  2. Excellent! Thanks for that clarification, Steven. Was planning on Texas, but SD seems better now other than that the timeframe is only 5 years. I just need to see if having an expired driver’s license will impact anything. And will confirm if anything has changed with new nomad applicants requirements also since you applied.

  3. Thank you for your blog post, it’s very informative.

    I have a question about South Dakota driving license.
    How did you manage to solve the issue with hotel receipt not having your physical address on it?
    Could you recommend a hotel/motel, as we likely have only one or two days to spare for South Dakota?

  4. Hi, Anna. If you set up an SD mail forwarding address before you arrive, just make sure to give that address to the hotel. However, if you check into your hotel before setting up an SD address, ask the hotel to print a receipt without your address included. They should be able to change or remove the address on the receipt they give you since hotels in Sioux Falls are used to people staying the night to get an SD driver’s license.

    Since I didn’t know this stuff in advance, here’s what I actually did:

    1. Stayed overnight at Super 8 by Wyndham Sioux Falls/41st Street.
    2. Went to the DMV and got rejected because they couldn’t accept forwarding addresses from Traveling Mailbox due to a legal technicality.
    3. Went to DakotaPost and got a new SD address from them.
    4. Got rejected from the DMV again because my hotel receipt had my Traveling Mailbox SD address instead of the new one.
    5. Went to the hotel and asked them to print a copy of my receipt with a different address. They had no problem with this since they were used to people in town for the same purpose as me.
    6. Third time was the charm at the DMV—success!

    It was no problem doing all of this in one day, but it took a lot of Uber rides. That’s why my post recommended staying in a hotel close to the DMV (Motel 6 and Sleep Inn Airport are both within walking distance).

  5. In regards to the “Residency Affidavit”, the questions are as followed…

    1. Is South Dakota your state of residence? Y/N
    2. Is South Dakota the state you intend to return to after being absent? Y/N
    3. Do you maintain a residence in another state? Y/N

    If my answers are all No, will they decline?

  6. Ryan, yes, I imagine they’d decline, or if you get a friendly person they might guide you on what needs to be the case for you to be approved.

    In case it helps, consider that they don’t specify any timeframe for when you intend to return. There’s also nothing wrong with changing your mind in the future if circumstances change and you decide to settle in another state.

  7. Does it matter how I book the hotel? I expect they should always provide a receipt, even if the night is booked via some booking website.

  8. Do you have to go to the same DPS in the city that my mailbox address is? Or can I go to any city in South Dakota?
    Thank you.

  9. Hi Steven. My wife is a flight attendant and a coworker told her about America’s Mailbox. (Guessing they’re similar to the ones you’ve mentioned ?) Anyway, her coworker owns an RV registered in SD using their “virtual” SD address. We live in the imperial state of CA and own a home here as well as an investment property in MI. Our intent would be to declare SD as our “home” but rent the CA property out and not sell it. Your article has a lot of good info but we’re wondering is it doable and worth it for us to “move” from CA to SD or are we opening ourselves up to potential dual residency and taxes, etc.? Thank you in advance.

  10. Kevin, IANAL but renting a property in California should be totally fine. That said, since that might create extra scrutiny and because CA is especially particular about domicile, if you are a high earner it might be especially important to sever a majority of ties to California and put extra effort into establishing and documenting your new domicile, e.g. through new business, financial, medical, educational, political, religious or other connections to your new home state. South Dakota won’t care about how much time you spend there, but CA will probably want to see real ties to your new state if they ever audit your case (for example, that you’re not returning to CA for standard medical appointments for yourself or pets).

  11. I live in Florida. Would owning a home and working in a different state cause issues if I did this in preparation for a nomadic lifestyle or should I wait till the time comes?

  12. Some things I wish I knew before going down this route:

    1). Need a firearm for protection as you nomad around too uncertain parts of the country? The big box stores in SD will not sell to you with a PMB (Private MailBox) address. You might get lucky with a mom and pop dealer willing to turn a blind eye.

    2). Need auto insurance? Good luck finding any with a PMB address. If you are an RVer, you can find RV insurance, but if you are a nomad in an auto, you are S.O.L. Your options are (a) drive illegally without insurance, (b) don’t drive at all, (c) trade in your car for a bulky, expensive RV you don’t even want in the first place, or (d) buy a plot of land that has a physical, residential address. The fact that DakotaPost has a physical highway address doesn’t fool anyone.

    Oh one more thing: one of my credit card companies will not let me change my address to a PMB.

  13. Aamir, thanks for sharing what’s been problematic about an SD PMB address. That’s important information for people considering this.

    For credit card companies, most accepted my PMB address via their websites but two did not. However, by calling them up, both easily accepted my PMB over the phone and updated my address in their systems manually. The only other companies that didn’t initially accept my PMB were crypto exchanges. I was able to easily verify my PMB address with one of them by submitting a photo of my driver’s license through their app, another required a utility statement with the address (I sent a phone bill with my address), and a third (crypto.com) simply refused.

    I don’t have firearms or own a car, so I haven’t run into the other two issues. During a quick search online about the firearms issue, I’ve seen many people say they had no problems buying from mom-and-pop gun stores at least five miles outside of major population centers, and there is nothing illegal about this. Others have said that for concealed carry permits, it’s not the state but each individual county sheriff that makes the decision. The applicable SD law says you need to have “physically resided in and [be] a resident of the county where the application is being made for at least thirty days immediately preceding the date of the application”: https://sdlegislature.gov/Statutes/Codified_Laws/2048038

    Regarding auto insurance, it seems you may not be able to get South Dakota rates on cars or trucks unless at least one of your vehicles is an RV.

  14. Great info! And previous comments definitely help planning my move to SD in near future. Just need to make sure it’s up to date, 2022 it is now!
    Thank you:)

  15. You said that you do not have a car. Vehicle registration is not a requirement for South Dakota residency? I ask because I have a leased vehicle that I will return before I move oversea. Thank you

  16. Larry, you don’t need to re-register your vehicle in order to get a South Dakota driver’s license, but it’s worth considering the question of whether other states might contest your new domicile and claim you still owe them taxes. The more links you maintain to another state, the more likely they are to do so.

  17. The physical address block is due to the Patriot Act. To get a driver license, a mailbox, a bank account, etc., you have to prove physical residency.

    I got super incensed about this when the state in which I did have established residency, Oregon, tried to rescind my driver license and vehicle registration when they saw I changed my address to a PMB (in the same state). There’s a niche of furor about the ails of the Patriot Act online but they’re as likely to get it repealed as Texas is to secede from the US.

    I learned that for the “homeless”, you can get an institution (homeless services type agency) to verify that you frequent a specific place that you can describe like: the corner of Main St and 1st Ave OR after proving I had been in the state the last six months with gas receipts the DMV changed my address to “Continuous Traveler” which I then could not use to in any other official capacity. When I updated my mailing address to a PMB in Wyoming it was rejected and I still haven’t checked the message they sent me in reply because I already addressed the problem and proved my residency.

    The hallowed halls that be are not set up for validation of a nomadic life within these 50 states. Nobody has put two and two together to understand what it means to be “stateless” in a domestic (rather than international) capacity. I was up in arms about homeless discrimination for a few weeks until I capitulated because I had the luxury to do so at the time. They weren’t hearing it, they’re just government workers. If you want to be a vagabond in the US, you must be of the hobo persuasion that does not own real taxable property. Thus, I don’t see even any legal evolution possible on the nomad discrimination front because terrorists 😱😱😱 and human traffickers and rapists (I mean, Central Americans legitimately seeking refuge used as a front to hand out billions in wall building contracts because there wasn’t otherwise a war handy. )!! This is the Land of the Free as long as you own land! Doesn’t count if you were born on it or sacrificed all but your life protecting it. The American legal system is a bastardized version of the British “Common Law” that was established 1000 years ago when they had Lords and peasants.

    And here I am trying to figure out how to resolve this yet as I’m trying to refinance my van loan and they are very confused about where the vehicle is titled/registered vs where my mail goes vs where I am physically at peasant, I mean present. I guess I really do need to buy some land to lord over. Maybe I should buy a plot of land in SD, with a house or put a tiny house on it, and sell 5 year residential roommate leases to all the vanlifers that need a domicile.

    Lemme know if you come up with a solution! Just holler down this rabbit hole.

  18. Melanie,
    Yours is the key reason people establish residency in SD or FL(besides the tax benefits). Most states have never allowed a PMB/PO box to be used on driver’s license. Now some erroneously use the Patriot/Real ID act excuse as do many insurance companies.

    The Real ID act does NOT specify your address needs to be a residential/physical dwelling. Yes the original draft did have that language, but the act as passed does not. This is because Escapees worked with the MVAA(a special interest group representing state motor vehicle agencies that pretty much wrote Real ID) to change the language before the bill was passed. As passed it says only that the applicant provide proof of their ‘primary address’.

    Contrary to what some may believe, state compliance with the Real ID act isn’t even mandatory. States can currently, and may continue after 3/5/2023, issue non compliant drivers licenses. The only hitch is bearers of non-compliant ID’s will need something else DHS considers compliant such as a passport/military ID/Green Card to board domestic commercial flights and enter certain federal facilities.

    Nomads choose SD and FL because individual states, NOT the federal government, decide what does and does not constitute residency or a ‘primary address’. South Dakota explicitly allows PMB’s as long as you show proof of spending one night in the state and sign a continuous traveler declaration. Florida, partly because of a large number of residents living aboard boats, also allows PMB’s or boat slips to be used on your drivers license though establishing residency in FL takes longer. Any state is allowed to do this, real ID or not, it’s just that most choose not to.

    Some insurance companies will not accept PMB’s due to corporate policy or state law. Those very same companies(Progressive/Geico/etc) will however sell a ‘full timer’ policy to someone using a PMB if the state of domicile allows. Qualifying for a ‘full timer’ policy generally require at least one vehicle be titled and registered as an RV. GoodSam(operating in the most popular domicile states) not only provides you a legal address and mail forwarding service, they also sell ‘full timer’ insurance.

    As to banking, again the Patriot act is not the real culprit. Not directly at least. The problem is more often than not misunderstanding. Many banks will not open an account for you if using a PMB because they interpret the law too narrowly, or because of state banking laws, but BOA will in fact open an account for you with nothing more than a passport and mailing address in some states(IIRC SD is one of them). I have an account at a local credit union that was opened in just such a way. The only address connected to the account is a PO box.

    TL;DR:

    • States can allow or deny PMB’s as a legal address regardless of the Real ID act. It’s called Federalism.
    • Insurance companies and banks may do the same depending on corporate policy or state law.
    • Some banks, in some states, only require an ID and mailing address. Smaller credit unions are often the easiest option.
    • SD and FL domicile are your best bets if ‘full timing'(TX is also friendly).
    • A ‘full timers’ policy gets you around insurance issues though you typically need to have a titled and registered RV. This can be a travel trailer with your car considered the tow vehicle.
  19. Hi, can anyone recommend a credit union in Sioux Falls – or an SD based one that you can sign up for online?

    Also, I assume you file your federal taxes with an SD based accountant? My income stream is a bit complicated, so I can’t really just file on my own.

    Thanks!

Leave a Reply

Your email address will not be published.