To transfer residency from one U.S. state to another city, follow these steps: 1) Notify the previous state by submitting a "change of address" form or writing a letter confirming relocation, often within 30 days of moving. 2) File a change of address with the new state’s motor vehicles agency to update driver’s license and vehicle registration. 3) Update voter registration, tax filings, and legal documents (e.g., wills, trusts) to reflect the new state of residence. 4) Check tax implications, as states may require residents to file income or property taxes differently (e.g., Texas has no state income tax, while California imposes a 13.3% rate). 5) Consult a tax professional or legal advisor to ensure compliance with both states’ laws.

This process is critical because state residency directly impacts tax obligations, legal rights, and access to public benefits. For instance, the IRS mandates that individuals spend at least 183 days in a state to be considered a tax resident there, potentially avoiding double taxation. Data from the U.S. Census Bureau (2021) shows that 3.8 million Americans moved between states in 2020, with Texas and Florida receiving the most migrants due to favorable tax policies. States like New York and New Jersey, which have high income taxes, often see residents relocate to states with no or lower taxes, costing these states an average of $2,400 per person annually in lost tax revenue (National Conference of State Legislatures, 2022). Additionally, failing to update residency can lead to penalties, such as unclaimed tax refunds or legal disputes over jurisdictional authority. For example, a 2019 IRS audit revealed that 12% of taxpayers incorrectly claimed residency in multiple states, resulting in $450 million in adjusted liabilities. Ensuring proper residency transfer safeguards financial and legal interests while optimizing tax outcomes.