If you're a California homeowner who just paid state income taxes and thought "that's it, I'm moving to Texas," you're not alone. According to U-Haul's annual growth index, California has topped the list of states people move out of for six years running, and Texas and Florida have been the most common destinations. It's easy to see why: California's top marginal income tax rate is 14.4%, and even for most types of income it sits at a still-steep 13.3% for joint filers over $526,000.
The pull toward "no income tax" states is real. But before you call a moving company, it's worth understanding what "low-tax" actually means once you dig past the headline number — because the full picture is more nuanced than most relocation articles let on.
The Nine No-Income-Tax States (and What You Might Not Know)
The states that have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. That sounds like a clean win — until you look at how those states fund schools, roads, and public services instead. 1040
States without an income tax typically rely more heavily on sales taxes, property taxes, excise taxes, business taxes, and fees to make up the difference. A few examples that matter most for homeowners:
- Texas carries an average effective property tax rate around 1.6% — among the highest in the country, to the point that middle-income Texans can end up paying more in total state and local tax than middle-income Californians. countrytaxcalccountrytaxcalc
- Florida homeowners face a combined state and local sales tax rate averaging around 7%, plus notoriously volatile homeowners' insurance premiums driven by hurricane risk — a cost that rarely shows up in "no income tax!" headlines.
- Washington has no personal income tax on wages, but does tax certain capital gains income over roughly $270,000, which matters a great deal if part of your move is about protecting investment or business sale proceeds. stltoday
- New Hampshire is the trickiest of the nine: its tax on interest and dividend income was originally scheduled to phase out by 2027, but that phaseout was accelerated, making it a true no-income-tax state only as of 2025 — a reminder that these rules shift, and last year's blog post about a state's tax code may already be outdated. kiplinger
The bottom line: avoiding state income tax can save real money, but your overall cost of living usually matters more — states like Tennessee and South Dakota offer broad affordability, while Florida, Washington, and Alaska tend to offset their tax advantages with high housing, insurance, or everyday costs.
The California Exodus, By the Numbers
This isn't a fringe trend. Recent IRS migration data shows millions of people leaving high-tax states like California and New York each year, with roughly $10 to $12 billion in adjusted gross income leaving California in a recent year alone — much of it tied to higher-income households. And the incentive to leave may be growing: a proposed one-time 5% wealth tax on California's wealthest residents is headed to the November 2026 ballot, which has already prompted some high-net-worth Californians to consider relocating ahead of a possible retroactive effective date.
If you're seriously weighing a move for tax reasons, a few things are worth knowing before you act:
- California doesn't let go easily. The Franchise Tax Board monitors the line between resident and non-resident status rigorously, and someone is generally still considered a California resident if they're in the state for anything other than a temporary or transitory purpose — so simply buying a house in Nevada doesn't automatically end your California tax obligations. woodllp
- Timing matters enormously. Some Californians look to establish residency elsewhere before selling real estate or a business, or before a liquidity event like a stock sale or litigation settlement — but many people have unrealistic expectations about how quickly and cleanly that residency change actually happens. woodllpwoodllp
- Talk to a tax professional before you talk to a moving company. The size of your savings depends heavily on the type of income involved (wages vs. capital gains vs. retirement income) — not just the state's headline tax rate.
The Boomerang Effect: Why People Move Back
Here's what most "move to a low-tax state" content leaves out: a meaningful number of people who leave California end up returning. Migration out of California spiked during the pandemic as remote work freed people to live somewhere cheaper while keeping a California job — but in more recent years, outmigration has eased, and Californians have become more selective about where they land as prices rise nationwide. Higher-income earners still show some preference for no-income-tax states, but that net outflow is far smaller than it was at the pandemic's peak, and now more closely resembles pre-pandemic patterns. ppicppic
Why the second-guessing? Once the tax spreadsheet meets real life, other costs show up: property insurance premiums in hurricane- or wildfire-prone areas, medical infrastructure that doesn't match what you're used to, summer heat or humidity extremes, and — for many retirees — the cost and hassle of flying back to see grandchildren, friends, and doctors you trust.
Before You Pack the Moving Truck: Consider This Quick Checklist
If you're genuinely considering a move, consider these steps:
- Run the real numbers with a CPA or tax attorney, not a relocation blog — factor in property tax, sales tax, insurance, and how your specific income type is taxed in the destination state.
- Rent before you buy. Spend six to twelve months in the new location — ideally including the least pleasant season of the year — before committing.
- Stress-test the assumptions that matter to you, especially healthcare access, climate extremes, and insurance availability, which vary enormously by state and even by zip code.
- Understand what you're leaving behind. If you've owned your California home a long time, you likely have a low Prop 13 property tax base — and under current rules, that benefit can sometimes travel with you to a new home. (We've written a full breakdown of how that works — see You Can Take It With You: How to Transfer Your Property Tax Assessment.)
Whatever You Decide, Talk to Debbie First
Here's the honest truth: whether you ultimately move to Texas, stay right here in Del Mar, downsize within San Diego County, or decide next year that California is still home after all — the decision to sell a home is the biggest financial move most people make, and it deserves someone who has actually done it, dozens of times, at the highest level.
Debbie has built her entire practice around one outcome: getting sellers the best possible price with the least possible stress — and her clients say so themselves. Debbie has earned dozens of five-star reviews from past clients on Google, describing exactly the kind of experience you'd want if you're navigating a major life change: clear communication, sharp negotiation, and results that speak for themselves. (You can read those reviews yourself, and see more from buyers and sellers alike, on our testimonials page.)
So if the tax bill has you thinking about a move — for any reason, to any state, on any timeline — don't make your first call to a moving company. Make it to Debbie. She'll walk you through what your home is worth today, what a sale would look like, and whether renting your current place out while you "try before you buy" elsewhere might make more financial sense than most people realize.
Click Contact Debbie Carpenter today for a no-pressure consultation, or text or call (858) 735-0924. You'll be glad you did!
