Hi Everyone, Thank you so much for all your support and kind responses. I truly felt understood and I appreciate all of the advice and insight that was given.
I did do some research on my own and I found that yes it does seem to be the case that for clients the state that your butt is seated in is what seems to count. This is all a rather stupid and antiquated law that was created in the 1950's before the internet and frequent travel between states. The Zur institute says as much if you would like to read for yourself:
TeleMental Health Services Across State Lines. They also say that this offense if rarely prosecuted on it's own. So as long as my therapist isn't running a multi-state prostitution ring, stooping her clients or finding ways of offending the political official of the states she or I reside in it is unlikely that anything would happen.
I saw her today and she does seem to think we had a miscommunication about this issue when we had our initial discussion. I am somewhat frustrated by this as I did make monetary and living arrangements partially based on what I thought was my continued ability to see her, and may have asked for different things had I thought it was otherwise.
Fortunately, she has now agreed to continue to see me as long I have residency in the state that she is in and I am pursing activates that might defied as transitional (i.e. resolving a health concern while staying with a family member or attending graduate school). She says that given the length of the relationship and the overall success it's her interpretation of her ethical code that she should continue to see me under these circumstances.
I did suggest driving to the boarded I'm about 70 miles away. But this would leave me at a truck stop in the middle of nowhere. Not sure I want to do therapy there (and she says it's a stupid plan). I would also go see her in her office once a month if she was back to in person, but she seems to enjoy telehealth and wishes to continue in that way. I am sad about that, but it's no surprise. I also offer to pay her licensing costs for the state I'm in which would only be a few hundred dollars, but she declined and and does not wished to be licensed in the state i'm in. (I don't blame her it is a bit of a backwater).
This has been a painful experience, and I wish it had gone differently as I did feel betrayed. But I thing this goes to show that even in the best therapy relationships there will be problems and misunderstands that are difficult to endure--but they are not beyond resolution. It is wise to be mindful of this and to try to forgive the flaws of those who are helping you. I suspect my therapist's people pleasing tendencies and desire to follow ethics above rules (without ignoring the rules altogether) played apart here. As well as her preference to avoid bureaucracy and paperwork (she is self pay for this reason--and as said as much).
Thank you again to everyone who responded. It has been many years since I have been active here. It's nice to see some familiar faces in this thread. This forum is as helpful and kind as I remember it. Perhaps I'll stick around for a bit and see what use I can be.