How to leave Louisiana residency?

Thinking about leaving Louisiana residency? Whether you’re moving for a new job, retirement, or just seeking a change in lifestyle, it’s important to know how to officially leave Louisiana behind—especially when it comes to taxes. Louisiana has state income taxes and requires residents to report their worldwide income, so moving to a state with lower or no state income taxes, like Florida or Texas, can make a big difference in your financial situation.

This guide will walk you through the steps needed to establish a new home in another state, cut your ties with Louisiana, and handle any tax responsibilities related to Louisiana-sourced income. Whether you’re looking to save on taxes or just start fresh in a new place, these steps will help ensure a smooth transition.

Steps to leaving Louisiana residency

Step 1: Establish a new domicile

Leaving Louisiana residency starts with creating a permanent home in your new state. It’s not just about physically moving but also showing that you intend to make the new state your primary residence. 

Here’s how to get started:

1) Establish new residency

• Secure a residential address: Start by finding a place to live in your new state. Whether you’re renting or buying, this serves as the foundation for your residency claim. For example, in Florida, homeowners may qualify for tax savings through the homestead exemption.

• File a Declaration of Domicile: In states like Florida, you can file a legal document stating that your new state is now your permanent home, making it official.

Residency guides:

• Florida Residency Guide
• South Dakota Residency Guide
• Texas Residency Guide
• Nevada Residency Guide

2) Relocate your belongings

Moving your personal belongings to your new state is essential to showing that your move is genuine. Bring household items, cars, and any other important belongings to your new home.

3) Spend time in your new state

Spend as much time as possible in your new state to show that you are truly living there. States often use the 183-day rule to determine residency, meaning you must spend more than half the year in the new state.

4) Transfer IDs and vehicle registrations

Update your driver’s license and register your vehicle in your new state as soon as possible. This is one of the clearest indicators of your intent to change your residency.

5) Register to vote

Registering to vote in your new state is another important step. Voting records are often used by states to determine where your true residence is.

6) Update financial accounts

Notify your banks, credit card companies, and other financial institutions about your new address. This ensures all your official documents and accounts reflect your new residency.

7) Notify your employer

Let your employer know about your move, and make sure your payroll and tax withholdings reflect your new state. This helps avoid any confusion with Louisiana’s tax authorities.

Step 2: Sever ties with Louisiana

Once you’ve established a new home in another state, the next step is to cut significant ties with Louisiana. This shows that your move is permanent and prevents Louisiana from continuing to classify you as a resident for tax purposes. Here’s how to do that:

1) Close Louisiana financial ties

• Close local bank accounts: If you have any bank accounts in Louisiana, consider closing them or transferring funds to banks in your new state. This helps show that your financial activity is no longer tied to Louisiana.
• Cancel Louisiana voter registration: Register to vote in your new state and cancel your voter registration in Louisiana. Voting is a clear indicator of where you live, and states often use this information to verify residency.
• Update personal records: Update your address with the IRS, Social Security, and any other relevant entities. Keeping all personal and financial records in your new state helps solidify your move.

2) Sell or lease property

If you own property in Louisiana, selling or leasing it out can help demonstrate that you no longer plan to live there. Long-term leases show you don’t have personal access to the property, which helps prove you’ve moved.

3) Cancel local subscriptions/services

Cancel or transfer any Louisiana-based services, like gym memberships or utility services, to your new state. Keeping them active may suggest you still have ties to Louisiana.

4) Transfer healthcare and insurance

Find new healthcare providers and update your health insurance in your new state. This is another clear indicator that you have moved your life elsewhere and plan to live there long-term.

Step 3: Time spent outside Louisiana

To successfully leave Louisiana residency, it’s important to limit the amount of time you spend in the state after your move. Louisiana uses the 183-day rule to determine whether someone is still considered a resident for tax purposes. 

Here’s how to ensure that you aren’t classified as a Louisiana resident:

183-day rule

• Stay under 183 days:  Louisiana’s tax authorities consider you a resident if you spend 183 days or more in the state during a calendar year. To avoid being classified as a resident, you should spend fewer than 183 days in Louisiana each year. This includes any visits back to Louisiana, so plan your travel carefully.
• Maintain travel records: It’s crucial to maintain detailed records of your time spent outside Louisiana, such as flight tickets, hotel receipts, or any other documents that can prove you were not in the state. These records will be useful if your residency is ever questioned by tax authorities.

Step 4: Louisiana-sourced income

Even after you’ve left Louisiana residency, you may still have ongoing tax responsibilities if you’re earning income from sources within the state. Here’s how to manage that:

1) Ongoing tax responsibilities

If you continue to earn income from Louisiana (such as rental income, business profits, or wages), you’ll need to file non-resident tax returns. Non-resident tax returns ensure that only income earned from Louisiana sources is taxed, while the rest of your income remains untaxed by Louisiana.

2) Rental or business income

If you own rental properties or businesses in Louisiana, the income generated will continue to be subject to Louisiana taxes, even after you establish residency elsewhere. Be sure to work with a tax professional to handle the complexities of filing and ensuring you meet all of your tax obligations.