State tax residency.
How to actually change your domicile.

Section 1 · Domicile vs residency

These are not the same thing.

Residency

• A factual determination: where you physically live.
• You can be a resident of multiple states.
• Many states have statutory residency rules based on days spent in the state.
• California: any period of time in CA for non-temporary purposes can establish residency.
• New York: 183+ days in NY triggers statutory residency even if your domicile is elsewhere verify×DON'T TRUST, VERIFYClaim: NY treats individuals with 183+ days in NY plus a permanent place of abode as statutory residents.Verify at: NY Tax Department definitions ↗Both conditions (183 days + permanent place of abode) generally must be met for statutory residency. Confirm specifics..

Domicile

• The one state you consider your true legal home.
• You can only have one domicile.
• It follows you. If you move physically but do not change domicile, you may still owe taxes to your original state.
• Changing domicile requires intent + physical presence + severing ties with the prior state.

Section 2 · How states pursue departing high-income taxpayers

California and New York are the most aggressive. California's Franchise Tax Board (FTB) audits taxpayers who:

• Had California income or connections.
• Filed a part-year or non-resident return.
• Had a large income event (Bitcoin sale, business sale, equity vestingvestingThe schedule by which you earn the right to keep employer contributions or stock grants. You usually need to stay at the company for a set period before the money is fully yours.Full definition) near the departure date.

What they look for

• Where you slept most nights (cell-tower data, credit-card records, toll records).
• Where your spouse and children are.
• Where your doctor, dentist, CPA, attorney are.
• Club memberships and professional licenses.
• Voter registration.
• Vehicle registration.
• Where you bank primarily.
• Social ties and frequent contacts verify×DON'T TRUST, VERIFYClaim: California FTB residency audits examine multiple factors including physical presence, family ties, and business connections.Verify at: CA FTB residency status ↗FTB Publication 1031 details the residency factors. The "closest connection" test weighs many factors holistically..

Section 3 · How to actually establish new domicile

Year of move (minimum)

• File Declaration of Domicile (or equivalent) in the new state on day of arrival.
• Register to vote in the new state.
• Change driver's license to new state (ideally within 30 days).
• Register vehicles in new state.
• Update address on all financial accounts, employer, IRS.
• Change "principal residence" on your mortgage or lease.
• Open a local bank account.
• Find local doctor, dentist, and professionals.
• Cancel gym memberships and professional memberships in old state.
• Spend the majority of your nights in the new state.

Document everything

• Keep a contemporaneous log of where you sleep each night for at least 2 years after moving.
• Save receipts in the new state.
• Save records showing establishment of local life.

The most important thing: actually live in the new state. Courts and tax authorities focus on where you actually spend your nights. The rest of the checklist supports the physical reality. It cannot replace it.

Section 4 · High-value income events and timing

If you sell Bitcoin while a California resident: California taxes that gain at up to 13.3% verify×DON'T TRUST, VERIFYClaim: California taxes long-term capital gains at the same rates as ordinary income, with the top marginal rate at 13.3% for incomes above approximately $1M.Verify at: CA FTB capital gains ↗CA does not have a separate long-term capital gains rate. Rates verify to current bracket structure..

If you establish Texas domicile first and then sell: zero state capital-gains tax. But: California can argue the gain accrued while you were a resident if you moved right before a known, pending sale.

California's sourcing rules

• For equity compensation: California taxes the California-apportioned portion even if you have moved.
• For business sale: similar apportionment rules.
• For Bitcoin: generally taxed at the current state of domicile at time of sale (less complex sourcing dispute, but verify with a CPA).

The practical advice: if you are planning a large liquidity eventliquidity eventThe moment when shares of a private company can finally be sold for cash. Usually triggered when the company gets bought out, or when it lists on a stock exchange so the public can buy its shares., consult a CPA specializing in state tax residency at least 12 months in advance. Not as you are selling.

Section 5 · No-income-tax states

States with no income tax on wages or investment income:

• Texas, Florida, Nevada, Tennessee, Wyoming, South Dakota, Alaska.
• Washington: no income tax on wages, but a 7% capital-gains tax on investment income above $250,000 (verify current threshold).
• New Hampshire: no income tax on wages; previously taxed interest and dividends, but the dividends/interest tax is being phased out (verify current status) verify×DON'T TRUST, VERIFYClaim: NH and WA have unique state-tax structures around investment income.Verify at: NH Revenue ↗ · WA Department of Revenue ↗Both NH (interest/dividends) and WA (capital gains) treat investment income differently from wages. Verify current rules at each state's website before relying on them..