Many individuals, wanting to liberate their wallets from taxes, have moved to states like Washington, Nevada, Texas, Florida and other states that have friendly state and local tax regimes. This trend, especially for residents of high-tax states such as New York, Oregon and California, has increased in recent years.
Until 2022, Washington had been a top choice for many individuals seeking a better tax climate. Effective January 1, 2022, however, Washington lawmakers adopted a capital gains tax, causing several residents to look for residency outside of Washington, including billionaire Jeff Bezos who moved to Florida. Additionally, effective January 1, 2022, the city of Seattle adopted a new payroll tax on certain businesses with payrolls of $7 million or more. On top of that, effective January 1, 2025, the city of Seattle upped the ante, adopting an additional payroll tax of 5% on businesses with high-earning employees (5% of annual compensation paid to any employee in excess of $1 million who is based at a business location within the city).
Rather than let the seas calm, Washington lawmakers are once again changing the tax terrain in the state. Several tax bills have been passed by the legislature and are on Governor Ferguson’s desk waiting to be signed into law. Whether these bills will become law is yet to be seen.