California Taxing People to Move Out of the Golden State

California is a state that many dream of living in one day. They dream of living near the beach, having the perfect weather every day, meeting celebrities on every corner, and potentially becoming a movie star. There is a lot to like about California, but it is an expensive state to live in, and sadly, you rarely get to see the beach because of work, celebrities are not on every corner, and the chances of making it big are slim. The weather is nice which is why many don't want to leave, but it isn't enough to keep everyone in the Golden State. Many have been leaving the state over the last few years, and while cheaper living and less traffic sounds nice, leaving California could come at a hefty price.

California Taxing People Moving Out of the State

For those unaware there is a tax to leave California, but before you panic too much, not everyone gets taxed. The tax focuses on individuals who make over $30 million a year and those who own businesses. If you are an individual that makes a hefty sum, you could be taxed for leaving the Golden State, and if you are a business owner looking to relocate your business out of California, then you too will be taxed. For those who own property in the state, you will also get taxed, but that is common within most states. The taxes can last up to 10 years, depending on the circumstance, making leaving California a hefty price tag for some. 

California Exit Tax

The exit tax is part of the California wealth tax. It is set up to go after anyone with a significant income who has property, stock, and other investments in California. The exit rate is .04 percent for those making over $30 million but is reduced to $15 million for those who are married and file separately. The purpose of the tax is to stop people from moving their businesses or moving out of state to pay lower taxes. This is a way to tax them for their assets, even if they have left the state. The businesses that are looking to relocate are the ones that are hit the hardest, as they are paying to start up again in a new state, while also paying these taxes for a state they no longer live in. 

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If you have contemplated moving out of California, you may want to wait and save up a little bit more. If you are making over $30 million a year, odds are the tax won't bother you too much, but if you are a business owner looking to relocate, you might want to think it over a bit more. For more on being taxed to leave California, make sure to click the link above.