CNBC has named the five states with the highest state and local income taxes as California, Hawaii, Vermont, Oregon and New Jersey.
California has a rule which allows you to claim non-residency status for state tax purposes while living abroad even if you keep contacts with the State which is known as the "safe harbor rule." To qualify you must:
- Live and work under a written contract abroad for at least 545 days
- Not earn more than $200,000 in investment income
- Not return to California more than 45 days during any calendar year.