For more than a dozen years now, more people have been moving from California to other states than have been moving to California from other states. This trend has been attributed to several factors, including cost of living to politics and highway traffic.

Compounding the problem is the fact that many companies — small business and large corporate enterprises alike — are abandoning California due to the high cost of doing business in the state, including Tesla Motors, Kaiser Aluminum, Wiley X Sunglasses, and Gordon Ramsay North American Restaurants.

Some people — especially high-net-worth individuals — want the best of both worlds. They love living in the Golden State for its weather, scenery, culture, culinary options, outdoor activities, and more. However, they would prefer lower taxes and a more business-friendly environment offered by other states such as Texas, Nevada, Florida, and Tennessee.

In an attempt to build this Shangri-La for themselves, they purchase a condo in Las Vegas, San Antonio, Nashville, or Fort Walton Beach and live there instead of in the house they own in California, in the mistaken belief that’s all it takes to reduce or even eliminate their obligation to pay California taxes.

Unfortunately, it’s not that easy. Ending your California residency is much more complicated than just moving out of state. And if you fail to meet all the requirements of becoming a non-resident, you’re likely to be pursued by the State of California’s Franchise Tax Board (FTB) for unpaid taxes and penalties.

In this post, we explain the rules that govern residency in California and what you need to do to officially end your State of California residency.

Defining “Residency”

According to the State of California, a resident is any individual who meets either of the following criteria: Continue reading… Continue reading… Continue reading…