In USA, what circumstances (if any) make it illegal for a homeless person to "rent" an address?

Question

I retired in 2014, sold my house (in USA) and hit the road. I spend much more time out of USA than in it. But I don't stay in one place long enough to justify telling people/businesses a new address.

Although I sold the house to a relative, I changed all my banking/tax/voting/etc. addresses to a relative in another state to reduce my state income tax. I even have a Google Fi phone number in that state. Is there anything illegal about this? Indiana at least has not complained.

Now I'm considering subscribing to a service that will handle my mail for me in a state with NO income tax but also no relatives. Any legal risk there?

To expand on this, retired in Indiana after living there twenty years; all mail has been to Oklahoma since; speculative new state is not decided. Voter registration and driver's license in Oklahoma. If XX agrees I am a resident and has no income tax, I guess they won't tax me. If XX says I am not a resident and tells OK, "He's still yours!" can OK tax me if none of my "ties" have an Oklahoma address? Can anyone charge me with fraud for using an address that I don't physically live at?

As for where the income comes from:

• Late wife's pension from New York State which they say is tax-exempt, but both Indiana and Oklahoma say, "Well, if they won't tax it, we will!"

• Pension from a company I worked for in New York 1984-1994 which has HQ in a different state and facilities in most states.

• Pension from a company I worked for in Indiana 1996-2003 which has HQ in a different state and facilities in most states

• Social Security, contributions for which came from six states, nine employers.

Closely related questions (not quite duplicates) that I am going to check for a possible answer:

How to change state residence for tax purposes as a "digital nomad"

How long do you have to live somewhere to be a resident for tax purposes?

Do I owe state taxes for a temporary (4 month) residence in California?

Living and Working in different states than resident states

Living and Working in different states than resident states

Tax consequences of changing state residency?

UPDATE: No longer need an answer, as I got married and “settled” in my wife’s state. But for what it’s worth, I was paying taxes and getting mail in Oklahoma. Took me a while, but I finally found Oklahoma’s law, which said (to simplify) that I was a resident of the last place I actually had a “domicile.” But that was Indiana, and their statute, if taken literally, said that I ceased to be a resident because I had sold the house and left. As for the accusation that I was trying to commit tax fraud, someone needs to read more carefully.

Answer 1

Even after a couple of answers and several back and forth comments, WGroleau (OP) still has no clear answer, as is evident from one comment: "It's other people (not only in this forum) that seem fixated on the location of the real estate, vehicles, and other property That does not exist." WGroleau, the problem here is that the laws are not written to accommodate outliers like you.

I had looked a little bit into something similar at one time. I thought "What if I sold my home and wandered the country, never spending more than a few weeks in any one state per year. Then none of them could count me as a resident, and none could charge me property taxes or income taxes." Problem: In most (all?) states, I probably still need to have a driving license and to have the vehicle inspected and/or registered, but to get that for a state you might need to be a resident of that state. This then leaves the situation basically at what you have described.

Now, the laws are not written to accommodate people like us. They are written to accommodate the 99.9% of people who are "normal" (whatever that is), not the 0.1%. And 99.9% of people have a building, or equivalent such as RV, which is their home and which spends all or most of its time in one location. So that is how the laws were written.

So, despite being financially oriented, this is really a legal question in the end because it depends specifically on the tangle of laws and how they relate to you. Hence the suggestion elsewhere that you consult a lawyer. There is also a law section on StackExchange, though you need to be careful how you ask there as many of them are strict about how you must ask questions there in a manner that is asking about what the law says rather than asking for legal advice.

I am not a lawyer, but my best guess as to how to legally safely do what you want is that you probably need to actually reside in a certain state for a while before you can claim it as your home state without worrying about fraud. So you choose state N as your desired new official home state: you probably need to go there physically, stay there for the majority of the time for more than 6 months, and have a way to prove it. That ties you down for 7+ months (only once initially, not every year... unless the state domicile definition says every year), which might be annoying, but it might be necessary for what you want. Then, even once you continue to travel the world, make sure that you keep coming back to the area that you considered home. Make it evident that it is "the place you come back to after you are away."

If you don't want to go through the hassle of being tied down for more than a half year and then being forced to come back to that spot occasionally, then you will have a hard time satisfying the legal requirements. Either way, consulting a lawyer is a good idea.

The comment by @Grade'Eh'Bacon makes me think I should leave a stronger disclaimer...

Warning: If you are not careful (and maybe even if you are careful), you could be accused of tax fraud. Maybe if OP lived in NY and claimed FL, it might actually be tax fraud, but that is not what was described. OP describes a situation where, if it weren't for the pesky "... and remains your domicile until you establish a new one elsewhere" type clauses, they might not even be eligible to be called a resident of any state - but that pesky (in this case) clause does exist. It may be technically tax fraud in law in some states, but it is not tax fraud in fact; that is translated legalese for "what you are doing is not actually wrong or bad, but because of the wording of the law, you could still run afoul the legal system anyway". And for that reason, that it is not really tax fraud and would only be labeled so based on such a technicality, it is possible OP might even be able to win in court using the argument that the law fails to consider their situation. But that is a big "maybe," one which could cause headaches if tempted.

Even if you do everything right, still, you might not be able to prove that you did everything right. Unfortunately for you, if a state can provide evidence that they think you should be called their resident, more evidence than you can provide to the contrary, then it does not matter how right you may be; all that matters at that point is who the judge is and what mood they are in that day. Again: consult a lawyer.

Answer 2

You owe taxes to the state where you earned the income, and also to the state where you physically live. Most, maybe all, states have laws that let you claim credits for taxes paid to other states so that you're not paying double taxes by living in one state while working in another. Most states have deals with all their neighboring states so that you only have to file taxes in one. For example, I live in Michigan, and Michigan borders Ohio. Lots of people who live near the border live in one state but work in the other. So the two have a deal that anyone who lives in Michigan but works in Ohio just has to file a Michigan tax return and pay Michigan taxes, and anyone who lives in Ohio and works in Michigan just has to pay Ohio taxes. Oh, I should note that these adjacent state deals apply only to employment income, not business income. If you own a business in another state, you'll still have to file taxes in that state. You still should get tax credits in your residence state.

In general the fact that you use a server in another state doesn't make you liable for taxes in that state. I understand that New York says that if you work from home and the company headquarters is in New York, you have to pay New York taxes. Maybe there are a few other states who do this. But just because a server is in their state? I've never heard of this. If I order business supplies that are shipped from a warehouse in Arizona, that doesn't make me liable for Arizona income taxes, etc.

You are legally a "resident" of the state where you actually live. If you have a home and live in it most of the time, then you are a resident of the state where that home is. A "home" doesn't have to be a house. It could be an apartment, an RV that you live in in a trailer park, a tent, etc. If you don't own any sort of fixed home and you travel around a lot, this could be tricky.

You mentioned Oklahoma. Oklahoma defines "resident" as follows:

An Oklahoma resident is a person domiciled in this state for the entire tax year. “Domicile” is the place established as a person’s true, fixed, and permanent home. It is the place you intend to return whenever you are away (as on vacation abroad, business assignment, educational leave or military assignment). A domicile, once established, remains until a new one is adopted.

(https://www.ok.gov/tax/documents/511NRPkt-14.pdf)

I'm not sure that that clears things up for you.

You can't just pick a state with low taxes and claim that as your residence. No way is the state where you actually live going to accept that. If you are in an ambiguous situation, like you spend 6 months per year in state A and 6 months in state B and you have no fixed home in either -- maybe you stay at motels or live in your minivan -- you might get away with picking the state with the most favorable tax laws as your residence. But if you spend 7 months in state A and 5 months in state B, state A will almost surely claim you are a resident and owe them taxes. If you regularly wander the country, never spend more than a few days in any one place, and rarely come back to the same place twice, then you have a complicated situation and you probably need to talk to a tax lawyer.

Update - 3-4-2019

Let me correct a sloppy statement that I made above, and clarify.

You don't necessarily have just one state of residence and only have to file income taxes in that statement. In general, you have to file taxes for any state where you lived long enough to receive income in that state. If, say, you regularly travel between 4 states and spend a few months in each, then you'll have to file as a part-year resident for each of those 4 states.

You're considered a resident of a state (for at least part of the year) if you worked there to earn any income, or if you received non-wage income while living there, such as retirement benefits or profits from investments.

Yes, if you live in state A and go on vacation to state B for a week, you aren't expected to file a state B income tax return for the retirement income you received that week. I'd have to check the exact text of the laws on this. I know I've seen text like "gone for a short time and expect to return". It's possible that you could find a loop hole in the technical wording.

But if you live 6 months in state A and 6 months in state B, I would be very surprised if either state accepted that you were just in their state on "vacation" and not a part-year resident.

Ok, so what does it mean to be a "resident"? The OP says he travels around many states, so here's the definition from Missouri -- an example I used just because it happens to be the first one I found.

"The place an individual intends to be his/her permanent home; a place that he/she intends to return whenever absent. A domicile, once established, continues until the individual moves to a new location with the true intention of making his/her permanent home there. An individual can only have one domicile at a time."

I've seen similar wording for other states. Note it most definitely does not say, "A place that the taxpayer picked because it resulted in him paying the least taxes, regardless of whether he ever actually lives there." You have to actually live there on a regular basis. Other laws I've seen make clear that it doesn't have to be a house or apartment. It can be a homeless shelter, a space in a mobile home park, etc.

If you literally are constantly on the move and have no place you plan to return to, if you rarely park your RV in the same place twice, I strongly suspect that they would say that you are a resident of their state for the time that you are driving around their state.

If you really want to pursue this, you probably need to talk to a tax lawyer. If you fail to pay the taxes that the state believes you owe, that's tax fraud, and to government officials, tax fraud is worse than rape and murder.

Answer 3

It depends on the rules in the specific places you stay. Specific places being countries or states.

Some states may consider pension payments to be taxable income, others may not. Some may consider presence for X days to constitute residency, X days may be 60 days in a calendar year whether or not those days are continuous.

It doesn't matter so much where your mailbox or mail handling service is located, it matters:

1. Where are you physically?
2. What constitutes income in that location?
3. What criteria must be met to establish residency domicile status in that location?
4. Can other taxes be used to offset my liability here?

You may owe taxes in more than one place. Some states will allow you to offset other states' taxes against theirs. Some states in the US are really harsh on income taxes. It's my understanding that if you own real estate in New York, all of your income, no matter the source, is taxable income in New York whether or not you were ever in the state that year.

Ultimately, you can't just put up your hand and say, "that's my tax domicile so I'm exempt from all your taxes." There is no umbrella US regulation on this topic, the states determine who they consider to be residents and how those residents are to be taxed.

While it's possible you may be considered a resident of multiple states and owe income taxes in multiple states, it's equally possible that you won't meet the residency criteria for any state regardless of whether or not that state has an income tax. The issue you face, as addressed in @Jay's answer, Oklahoma will consider you a resident of OK until you have established residency somewhere else.

Answer 4

Your case is greatly simplified by the fact that you are only collecting retirement income. If you were working and earning a paycheck in a particular state, that might complicate avoiding income taxes.

If you wish to establish residency in a no income tax state such as Wyoming, Nevada, or Texas, etc., you must actually move to the desired state and take up residence there for 6 months. You should register your vehicles in that state, obtain a drivers license, etc., and never establish residency elsewhere.

If you truly are a nomad who does not live elsewhere, then this is a legal way to establish residency. If, however, you live in another state for more than 6 months of a calendar year after establishing residency in your desired state, you could be legally obligated to move your residency to the new state in which you spent a majority of the year residing.