diff --git a/state/remote/remote_test.go b/state/remote/remote_test.go
index 16afccdf1..04f875747 100644
--- a/state/remote/remote_test.go
+++ b/state/remote/remote_test.go
@@ -2,6 +2,9 @@ package remote
 
 import (
 	"bytes"
+	"fmt"
+	"io/ioutil"
+	"os"
 	"testing"
 
 	"github.com/hashicorp/terraform/state"
@@ -46,8 +49,8 @@ func TestRemoteClient_noPayload(t *testing.T) {
 	s := &State{
 		Client: nilClient{},
 	}
-	if err := s.RefreshState(); err != ErrRemoteStateNotFound {
-		t.Fatal("expected ErrRemoteStateNotFound, got", err)
+	if err := s.RefreshState(); err != nil {
+		t.Fatal("error refreshing empty remote state")
 	}
 }
 
@@ -59,3 +62,72 @@ func (nilClient) Get() (*Payload, error) { return nil, nil }
 func (c nilClient) Put([]byte) error { return nil }
 
 func (c nilClient) Delete() error { return nil }
+
+// ensure that remote state can be properly initialized
+func TestRemoteClient_stateInit(t *testing.T) {
+	localStateFile, err := ioutil.TempFile("", "tf")
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	// we need to remove the temp files so we recognize there's no local or
+	// remote state.
+	localStateFile.Close()
+	os.Remove(localStateFile.Name())
+	//defer os.Remove(localStateFile.Name())
+	fmt.Println("LOCAL:", localStateFile.Name())
+
+	local := &state.LocalState{
+		Path: localStateFile.Name(),
+	}
+	if err := local.RefreshState(); err != nil {
+		t.Fatal(err)
+	}
+	localState := local.State()
+
+	fmt.Println("localState.Empty():", localState.Empty())
+
+	remoteStateFile, err := ioutil.TempFile("", "tf")
+	if err != nil {
+		t.Fatal(err)
+	}
+	remoteStateFile.Close()
+	os.Remove(remoteStateFile.Name())
+	//defer os.Remove(remoteStateFile.Name()
+	fmt.Println("LOCAL:", localStateFile.Name())
+	fmt.Println("REMOTE:", remoteStateFile.Name())
+
+	remoteClient := &FileClient{
+		Path: remoteStateFile.Name(),
+	}
+
+	durable := &State{
+		Client: remoteClient,
+	}
+
+	cache := &state.CacheState{
+		Cache:   local,
+		Durable: durable,
+	}
+
+	if err := cache.RefreshState(); err != nil {
+		t.Fatal(err)
+	}
+
+	switch cache.RefreshResult() {
+
+	// we should be "refreshing" the remote state to initialize it
+	case state.CacheRefreshLocalNewer:
+		// Write our local state out to the durable storage to start.
+		if err := cache.WriteState(localState); err != nil {
+			t.Fatal("Error preparing remote state:", err)
+		}
+		if err := cache.PersistState(); err != nil {
+			t.Fatal("Error preparing remote state:", err)
+		}
+	default:
+
+		t.Fatal("unexpected refresh result:", cache.RefreshResult())
+	}
+
+}
diff --git a/state/remote/state.go b/state/remote/state.go
index 5f45129d6..18427f341 100644
--- a/state/remote/state.go
+++ b/state/remote/state.go
@@ -2,13 +2,10 @@ package remote
 
 import (
 	"bytes"
-	"errors"
 
 	"github.com/hashicorp/terraform/terraform"
 )
 
-var ErrRemoteStateNotFound = errors.New("no remote state found")
-
 // State implements the State interfaces in the state package to handle
 // reading and writing the remote state. This State on its own does no
 // local caching so every persist will go to the remote storage and local
@@ -37,8 +34,9 @@ func (s *State) RefreshState() error {
 		return err
 	}
 
+	// no remote state is OK
 	if payload == nil {
-		return ErrRemoteStateNotFound
+		return nil
 	}
 
 	state, err := terraform.ReadState(bytes.NewReader(payload.Data))