In the legal world there is a big difference between one's "domicle" and one's "residence". For starters, you can have as many residences as you want, but you can have only one domicile (legally speaking). So your domicile is your legal home, which you treat as your fixed and permanent location. It's your principal establishment. Residence is more of a transient concept; your temporary place of abode.
For instance, I have a lot of senior "snow bird" clients who "fly south for the winter", meaning that they spend the winter months in Florida to avoid all of the blizzards up here in New England, but then they spend the other three seasons in Connecticut. So their domicile is in Connecticut while they have a residence in Florida.
I suppose the obvious question is, "Who cares?" Well, the various state agencies in charge of raising revenue care very much. Your domicile's location will determine which state can tax your income and your estate when you pass away. So...if minimizing or eliminating such state taxes is important to you then you should make it clear to everyone that your domicile is in a low (or no) tax state.
But domicile is, to borrow a legal term, a "question of fact". This means that you need to look at the facts of each case to make a determination, and many times the determination is not so cut-and-dry.
How do you make sure that your domicile is crystal-clear to an objective observer? Well, you should keep in mind that if your domicile becomes a legal question then courts tend to look at the following facts: (1) residence at death, (2) your proclamation of domicile in your wills, trusts, deeds, etc. (3) ownership of real estate, (3) place of automobile registration, (4) place to which you return to from trips, (5) where you're registered to vote, (6) the address you use in tax returns and whether you file them as a "resident" or "non-resident", (7) locations of bank accounts and safe deposit boxes, (8) hobby materials, (9) the location of your valuable personal property, (10) where your pets are kept, (11) location of deceased family members, (12) membership in clubs and religious organizations, (13) location of volunteer activity, (14) location of political activity, (15) place of birth, and (16) local newspaper subscriptions.
Remember, many times there are some big bucks involved in this question so there are plenty of important court cases that focus on this issue. So if this is one of your concerns then discuss this topic with your accountant and estate planning attorney.