How to Meet South Dakota Residency Requirements for Your Taxes

South Dakota has no state income tax, which can attract many individuals and businesses. To enjoy these benefits, you must officially become a resident. This means that you need to demonstrate that The Mount Rushmore State is your main home. You can do this by getting a South Dakota driver’s license, registering to vote and setting up a permanent address. Here are five common steps to meet those residency requirements for your taxes.

If you’re thinking about a residency change to another state, a financial advisor can help you determine how it will affect your finances.

Step 1: Obtain a South Dakota Address

To establish residency in South Dakota for tax purposes, the first step is getting a South Dakota address. Many people use a mail forwarding service to get a physical address in the state. This option is especially popular with RV enthusiasts and frequent travelers because it provides an easy way to handle mail while on the go. With a South Dakota address, you can start the process of becoming a resident. 

Step 2: Establish Domicile in South Dakota

To establish domicile in South Dakota, you must demonstrate your intent to make the state your permanent home. While South Dakota does not have a minimum residency requirement, maintaining a consistent presence can help solidify your claim. It’s also advisable to keep records of your time spent in South Dakota, such as utility bills or lease agreements, to further substantiate your residency.

Step 3: Register Your Vehicles in the South Dakota

Registering your vehicles in South Dakota is an important step in establishing residency. To do this, you’ll need to visit a local South Dakota Department of Motor Vehicles (DMV) office with your vehicle’s title, proof of insurance and a valid ID. The DMV will assist you with the registration process, which includes paying any required fees and taxes. 

Step 4: Get a Driver’s License and Register to Vote

Getting a driver’s license in South Dakota is another key step to establish residency for your taxes. This indicates your intent to live in the state and acts as your primary ID.

To get a driver’s license, you can visit a South Dakota Department of Public Safety office. You will need to prove your identity with a passport or birth certificate, and Social Security number. You also need to provide two documents demonstrating your South Dakota address, such as a utility bill or a lease agreement that is less than one year old.

Registering to vote in South Dakota, while not mandatory, can further establish your residency. To register, you need to be a U.S. citizen, at least 18 years old by the next election. In 2024, the State Senate eliminated the 30-day residency requirement for voter registration. 

You can register at your county auditor’s office or by mailing a completed registration form.

Step 5: Obtain a Residency Affidavit From South Dakota  

To establish residency in South Dakota, you need to obtain a residency affidavit, which is a formal declaration that the Mount Rushmore State is your primary home.

You can get this affidavit by visiting a local notary public or a South Dakota driver license examiner, who will check your identity and witness your signature, making the document legally binding. This affidavit is key as it officially proves your residency status, important for tax and other legal purposes.

Bring documents that show your connection to South Dakota when applying for the affidavit. These might include your South Dakota driver’s license, voter registration, or proof of a physical address like a lease agreement or utility bill, which support your residency claim.

Other Considerations for South Dakota Residency and Taxes

Beyond the logistical steps, there are financial and legal implications to consider when establishing residency in South Dakota. 

For example, you should sever ties with your previous state of residence to avoid potential tax liabilities. This might involve closing bank accounts, selling property or ending memberships and subscriptions tied to your former state.

Bottom Line

Establishing residency for tax benefits in South Dakota requires demonstrating that your primary home is in the state. This involves obtaining a South Dakota driver’s license, registering to vote and updating your mailing address. It’s also important to spend a significant amount of time in the state and sever ties with your previous state by closing local bank accounts and transferring vehicle registrations.

Estate Planning Tips

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