How do state income taxes work when you work in a different state?

That person will save you far more money and effort than you spend on his or her services. Absolutely. If you're taking advantage of a tax situation like SD's, you 100% need an accountant who understands how it works. If you try to figure it out yourself and get it wrong, it's going to cost way, way more than an accountant's fee in time, money or both.

(I work with people who occasionally try to take advantage of situations similar to the ones you're describing. At least half the time, they don't notice some fine print here or there and their plan to save $200 ends up costing them $1000+.)

Technically you owe taxes to the state you work in. For example I live and work in Texas but a couple of times per year I go to CA and work there for a week. I owe CA taxes for the money I earned while in CA. My company is nice enough to figure this out for me based on my travel. While 10 years ago no one really cared a lot of states (Ca especially) are really cracking down on this because they want their money.

For most states, you pay taxes to the state in which you perform the work. But, with telecommuting, it starts getting complicated. You're going to have to look at the rules for each state that you'll be passing through - some states use 'convenience of the employer' as the test rather than physical presence. Also, your employer will want to be aware of your travel/movements, (if they aren't already) because your activities in a state may cause the employer to have http://www.ngelaw.com/files/Publication/fdecec6e-17f2-44d4-bfd4-adcf651c3777/Presentation/PublicationAttachment/1d4ed66b-28ab-4c6a-a8fe-b1f118edb39c/Establishing%20State%20Tax%20Nexus%20Through%20Telecommuting%20Employees.pdf (and thus be subject to tax) in that state. http://www.journalofaccountancy.com/Issues/2009/Jun/20091371.htm a short article on the two tests.

Every state's a little different. You'll have to file a report for the state where you work, as well as the state where you live; however, some states may have a credit back if you work in a state but don't live there. I had a year where I was working in New Jersey but living in New York, and I had to file a report for both states but I think New Jersey gave me a tax credit based on my not actually living there.

I live in Virginia and teach online at a college in Oregon. I pay Oregon taxes.

I am not a CPA, but I've had some experience with this. It depends on the work state and the residence state. For about two years I lived in New Hampshire (which has no state income tax) and worked in Massachusetts. I had to pay Massachusetts income tax. When I started my current job (which is in Maryland), I was still living in Virginia. Both states have income tax. I paid Virginia income tax ONLY, even though my job is in MD. When I moved to MD I switched to paying MD income tax. However, MD has specific rules about this, i.e. you can only do it if you live in an adjacent state (VA, PA, WV, DC, but not DE because DE has no income tax). Any other state and you'd pay MD non-resident income tax, in addition to income tax in your resident state. I use a CPA to do my taxes, because I tend to move around a lot and have this issue. (As an aside: the year I moved to Maryland, I had to file income tax forms in three different states -- VA, MD, and MA, because I had owned a house in MA which sold that year -- even though it sold at a loss and I didn't owe any MA income tax, I still had to file in MA. I still don't understand why, but that's what my accountant told me.) Generally, I think the state where you live collects the income tax, unless that state has no income tax, in which case the state where you work will likely collect the tax. It all depends on the tax laws in your state of legal residence and state of legal employment. I'd suggest you consult a CPA licensed in either state. Don't rely on TurboTax or whatever because they're guaranteed to mess this stuff up. Other full-time RV-ers have probably run into a situation similar to yours; you may also want to consult with a full-time RV-ers group for more situation-specific advice. I've heard of the South Dakota thing before, and that it's a popular thing for full-time RV-ers to do.

Following up on tckma's suggestion about RV-specific advice, it turns out there are a number of sites dedicated to RV tax situations, including: http://www.rvtaxmaster.com/ http://www.rvtaxhelp.com/