There's no requirements for the TN visa holder reside in the same location as the business, to my knowledge. So a Canadian could reside in Washington and be employed in California.
Also, if you're living in another state getting a US drivers license might be impossible (how do you prove residency if your work visa is for a different state?) . Some states don't require residency for a drivers license, (Oregon and CA don't) but you can get a RealID on your DL if you can prove residency. RealIDs are strongly suggested because you can use them to fly in the States, instead of your Cndpassport + work visa. Again, TSA agents have the legal ability to detain anyone on a work visa, so having a RealID lowers the chance of complications.