In November of 2023, Jeff Bezos, Amazon executive, announced a move from his longtime home of Washington State to the complete opposite side of the United States down to southern, sunny Florida. While his Instagram post claimed a desire to be closer to his retired parents and his growing company, Blue Origins, it came as no surprise that the strategic move also happened to save him some $1B in taxes by the end of 2024.
In 2021, Washington State introduced a tax on the sale of long-term capital assets, such as stocks and bonds, while excluding real property. This tax applies to intangibles sold by Washington residents or certain tangibles located in the state.
After a legal challenge, the Supreme Court of Washington upheld the tax in March 2023, and enforcement began on April 15, 2023.
Interestingly, in November 2023, Jeff Bezos announced his move to Miami, Florida, to be closer to his aging parents and his growing company, Blue Origin. Though, economic incentives likely played a role as well.
Washington's new capital gains law defines a resident as anyone who owns a home and spends over 30 days a year in the state. Bezos purchased properties in Florida in August and October 2023 and announced his intent to change domicile in November. These actions support the argument that he aimed to be fully domiciled in Florida by January 1, 2024.
By November 2024, Bezos had sold approximately $13 billion in Amazon stock. This move potentially saved him $910 million in capital gains tax by leaving Washington before selling his stocks.
This situation underscores the importance of understanding state tax laws, their interpretations, and their potential impact on personal finances. Just moving to Florida may not have been enough to avoid the capital gains tax. But by announcing his intention on Instagram, citing personal ties to the state, and then buying multiple properties in the area, he built a strong defense to avoid Washington residency status. With the rise of remote work and costs of living, choosing a state that aligns with one's financial goals is increasingly relevant.
One of the great benefits of living in the United States is the diversity of state laws. Taxation is one of those areas where every state is a little different. If you are a remote worker, self-employed, or a business owner, it may be worth considering a strategic financial move just like Bezos.
