Seattle will always have a piece of Jeff Bezos\u2019s heart, according to the billionaire founder of Amazon. But Washington state\u2019s tax coffers will not always have a piece of Bezos\u2019s wealth.<\/p>\n
After some three decades in Seattle, Bezos said in an Instagram Florida\u2019s state tax regulations are probably also a draw for Bezos, especially when compared with Washington\u2019s rules, according to tax experts.<\/p>\n At the Florida-based law firm Comiter, Singer, Baseman & Braun LLP, the news of Bezos\u2019s planned move came as no surprise to tax attorney Brad Gould.<\/p>\n Gould, senior counsel at the firm, said well-heeled people have been moving to Florida from other states \u201cby the droves.\u201d He added: \u201cIn my firm, there are many, many ultra-high-net-worth clients who have done this exact same thing, and it is mostly a tax play.\u201d <\/p>\n \u201cUltra-high net worth\u201d in this case means clients worth at least $50 million, Gould noted. <\/p>\n There are also other reasons that people move to Florida, he noted, including business-friendly regulations and favorable laws on the protection of assets like homes. The beaches and the weather help, too, he said. <\/p>\n Also read:<\/strong> Even Jeff Bezos is part of the \u2018sandwich generation,\u2019 as he relocates to be closer to aging parents<\/p>\n And if low or no state income tax is what a person is looking for, Washington does have its appeal. Florida and Washington are two of nine states without their own income tax.<\/p>\n Internal Revenue Service statistics on household wealth flowing into and out of states show that Florida added $39.2 billion in adjusted gross income from 2020 to 2021. In the same time period, Washington added $178 million in adjusted gross income. By contrast, California lost a net $29 billion in adjusted gross income, the numbers show.<\/p>\n \u201cThe real benefit of Florida over Washington for Jeff Bezos is the lack of a tax on capital-gains income,\u201d said Jared Walczak, vice president of state projects at the Tax Foundation, a right-leaning think tank.<\/p>\n Washington has a 7% capital-gains tax that applies on capital gains above $250,000. The tax took effect in 2022.<\/p>\n Washington also has an estate tax that currently applies to estates worth more than $2.19 million. The estate-tax rate goes from 10% to 20%. \u201cOf course, when you are Jeff Bezos, it\u2019s the top rate that matters,\u201d Walczak added.<\/p>\n Bezos is currently worth an estimated $161 billion, according to the Bloomberg Billionaires Index.<\/p>\n Billionaires tend to move out of states with estate taxes as they grow older, according to a 2019 study from researchers at the University of California, Berkeley, and the Federal Reserve Bank of San Francisco.<\/p>\n Bezos is leaving Washington state as lawmakers have proposed a wealth tax that would affect billionaires like him. The proposed tax on \u201cextreme wealth\u201d would apply on assessed value beyond the $250 million mark.<\/p>\n \u201cBy moving now, Bezos is getting out in front of any potential Washington state wealth tax \u2014 and he also took a large bite out of any revenue projections,\u201d Walczak said.<\/p>\n Bezos\u2019s real-estate portfolio includes a $79 million mansion on a private island in Florida\u2019s Biscayne Bay \u2014 a home that\u2019s next door to another $68 million mansion he owns. <\/p>\n By pulling up stakes, he\u2019s joining a crowd of tony new denizens of the Sunshine State.<\/p>\n Those include Ken Griffin, CEO and founder of the hedge firm Citadel and the market maker Citadel Securities, who moved to Florida from Illinois. Griffin is worth an estimated $35.6 billion, according to the Bloomberg Billionaires Index.<\/p>\n People further down the income ladder have also been following the same pattern of moving to Florida and other lower-tax locales. Florida and Texas had the highest inflows of young and affluent households in 2021, according to a SmartAsset analysis of IRS statistics. Texas also has no state income tax.<\/p>\n You can count Tyreek Hill, a wide receiver for the Miami Dolphins, among that crowd. Hill said he was seriously considering playing for the New York Jets, which would have meant living in New York or New Jersey. \u201cJust those state taxes, man. I had to make a grown-up decision,\u201d said Hill, who is under a $120 million contract.<\/p>\n There are, of course, all sorts of reasons people decide to move. Family, weather and job opportunities are all in the mix. And relocating to the Sun Belt has been a trend for decades.<\/p>\n \u201cPeople move for a variety of reasons,\u201d Walczak said. \u201cWhen billionaires move for whatever reason, they usually land in low-tax states.\u201d<\/p>\n What\u2019s also in the background is the coming expiration of major parts of the 2017 Tax Cuts and Jobs Act. Without congressional action, five of seven federal income-tax rates will increase in 2026. That would mean the top federal income-tax bracket would return to 39.6%, up from 37%. <\/p>\n It also would mean that the federal estate tax would kick in a lot sooner. The 2017 law doubled the size of the exemption, with the tax currently applying to estates worth at least $12.9 million.<\/p>\n If rich taxpayers don\u2019t know where federal tax rules are going next, they can at least focus on their state taxes, Walczak said. \u201cVery few are going to become expats to avoid taxes. But they can move [to different] states,\u201d he said. <\/p>\n
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\n post that he\u2019s moving to be closer to his aging parents and to the Cape Canaveral, Fla., operations of Blue Origin, his space-travel company.<\/p>\n