Do I owe state taxes as a digital nomad if I have no permanent U.S. address?

You may still owe state income tax if your former state considers you a continuing domiciliary. States like California, New York, New Mexico, South Carolina, and Virginia are aggressive about taxing former residents who fail to establish a new domicile and retain ties, such as a driver’s license, voter registration, or bank accounts.

Two concepts that drive state tax liability:

• Residency: often a day-count test (183+ days or similar)
• Domicile: your permanent legal home, the place you intend to return

A state that claims you as a domiciliary can tax your worldwide income even if you spent zero days in the state that year.

Steps to break state residency as a nomad:

• Change your driver’s license to a nomad-friendly state (South Dakota, Texas, Florida, Nevada)
• Register to vote in the new state
• Close bank accounts or move them to the new state
• File a final part-year resident return in your former state
• Obtain a mail forwarding address in a no-income-tax state
• Terminate professional licenses or transfer them to the new state
• Change your address on your passport, insurance, and IRS records

Digital Nomad-friendly states with no income tax: Alaska, Florida, Nevada, New Hampshire (investment income only), South Dakota, Tennessee, Texas, Washington, Wyoming.

Dangerous states that fight residency terminations:

For more on breaking state residency, see our State Taxes for Expats.