More specifically, over the past few years there has been an ongoing trend regarding residents of certain high-tax states moving to states where the tax burden is not so hefty. Many experts state that we have only seen the beginning of this trend in domestic migration. California, New York, New Jersey and Connecticut have some of the highest tax rates in the country, and it is from these states many people are exiting.
Loss of SALT Deduction May Have Sparked Relocation Trend
Certain experts believe the loss of the SALT deduction has initiated the aforementioned relocation trends: the Tax Cuts and Jobs Act rolled out several reforms, such as the infamous $10,000 cap on local and state tax deductions. This change is considered by some as the principal reason that certain taxpayers are now establishing their primary legal residence in states where their tax liabilities can be better controlled than they can be in states such as California, New Jersey and New York.
Alan Goldenberg, a principal at Friedman LLP, stated that the dollar implications of the loss of the SALT deduction were a harsh reality for taxpayers when they saw their returns in black and white this year.
Tens of Thousands of New Yorkers Depart for Florida
Many residents of the high-tax state of New York are deserting the Empire State for Florida, which offers a far more favorable tax climate, and no individual income tax. Both retirees and those who have jobs that do not tie them to a precise location have left for the Sunshine State. Goldenberg stated that he expects to see more taxpayers following this trend in the aftermath of this year’s tax season.
With over 450,000 individuals moving out within the past year, New York had the third-highest number of departures among all 50 states. Statistics from the United States Census Bureau indicated that Florida received approximately 63,772 new residents from the Big Apple and other areas of New York.
Similar Trend in the Golden State
A similar trend in California has been noticed by our tax attorneys, as many residents migrated to states such as Nevada and Texas, which, similar to Florida, have no individual income tax. Washington and Arizona were also popular among those exiting California.
According to CNBC, a survey completed by the Federation of Tax Administrators indicated that California leads all other states with its tax rate of 12.3 percent, and this does not include the extra one percent surcharge for Californians who earn $1 million or more per year. The Golden State had the highest outflow of domestic residents in the country this year, and Texas received more of the defectors than any other state.
Some States Marketing Domestic Migrators
Codina Partners, a Miami real estate development firm, launched a campaign referred to as “Unhappy New Yorkers.” Armando Codino, who helped start the campaign said that, according to a recent WalletHub study, New York had the highest overall state tax burden, and that the launch of the Unhappy New Yorkers campaign was a day of awakening for residents who are upset about their tax bills. Codino also noted that the tax situation in New York will likely become worse due to falling tax revenues. Our tax attorneys will continue to watch as this pattern develops and stay informed with regard to California’s tax regulations and any new trends on the horizon.
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.