No-Tax-State Strategies: Texas, Florida, Nevada, Wyoming for Equity Earners

Nine U.S. states have no personal income tax: Alaska, Florida, Nevada, New Hampshire (wages only; NH is phasing out its dividends-and-interest tax by 2027), South Dakota, Tennessee, Texas, Washington (except for its capital gains tax), and Wyoming.

For tech employees facing large equity income, moving to one of these states can save 5-13% on a liquidity event. A senior IC with $3M of RSU vest income pays nothing in state tax in Texas versus $398K in California.

The move has to be real, not just a mailbox in Dallas. This article covers the practical mechanics of establishing residency and the trade-offs across the four most common choices: Texas, Florida, Nevada, Wyoming.

The four states compared

Texas. Major metros Austin, Houston, Dallas. Tech hub growth over the past decade. No income tax but high property tax (2-2.5% typical). High sales tax (6.25% + local). No estate tax.

Florida. Major metros Miami, Tampa, Jacksonville, Orlando. Long-standing retirement destination but now tech-friendly (Miami tech scene). No income tax. Property tax 1-1.5% typical. Homestead exemption limits assessment growth. No estate tax.

Nevada. Major metros Las Vegas, Reno. Close to California for visiting. No income tax. Modest property tax. Gaming taxes fund much of the state. Growing tech presence (Tesla Gigafactory area). No estate tax.

Wyoming. Small population, major metros Jackson and Cheyenne. Extensive LLC-friendly infrastructure. No income tax, low property tax, no estate tax. Growing interest as a crypto/tech low-tax destination.

The savings calculation

For an equity-heavy earner moving from California to Texas:

• CA top rate: 13.3%
• TX rate: 0%
• Savings on $3M of RSU income: $398K

For a senior IC moving from NYC to Miami:

• NY state + NYC rate at top: 14.78%
• FL rate: 0%
• Savings on $3M of income: $443K

These savings are gross; trailing nexus and partial-year residency reduce the actual savings. But for a mid-year move well before the liquidity event, most of the income gets the no-tax treatment.

Residency establishment mechanics

The move has to be genuine. Both domicile and closest-connections tests apply. Key steps:

1. Purchase or lease a residence in the new state. Owning is stronger than renting.
2. Physical presence. Spend more days in the new state than any other. 183+ days in the new state is the safest threshold.
3. Driver’s license. Change within 30 days of move (most states require it anyway).
4. Vehicle registration. Register vehicles in new state.
5. Voter registration. Register to vote in new state; vote in at least one election.
6. Financial services. Move bank accounts to new state branches or keep with national banks that don’t indicate state (Fidelity, Schwab).
7. Professional services. Switch to local accountant, attorney, doctor, dentist.
8. Mail. USPS change of address; use new state address for all correspondence.
9. Insurance. Update home, auto, life insurance to new address.
10. Clubs and memberships. Join local clubs, churches, organizations.

The move is documented through consistency across these factors. A California departure with maintained California doctor, California accountant, California voting registration, and frequent CA visits looks suspicious.

Partial-year residency rules

In the year of move, you file as a part-year resident. Income earned during the California period is California-taxed; income earned during the Texas period is not.

This means:

• Move before a large liquidity event for maximum savings
• The FTB will scrutinize a move that coincides with a large income event

For a tech employee with a scheduled IPO in Q4, moving in Q1 provides maximum clean tenure as a Texas resident before the vesting event.

Trailing nexus exposure

The former state’s trailing-nexus rules still apply. California is the most aggressive. For a California-to-Texas move with a large RSU grant made in California:

• Ordinary income at vest is allocated based on California workdays during the grant-to-vest period
• Capital gains on subsequent sales are sourced to residence state (Texas, no tax)

The ordinary income portion still bears some California tax. For a grant made 2 years before the move and vesting 2 years after, roughly half is California-source.

Home-ownership considerations

Keeping a California home post-move is suspicious. Options:

• Sell the California home
• Rent it out long-term (converts to investment property; FTB sees this as weaker connection)
• Rent it to family (still viewed as retained connection)
• Keep as vacation home (strongly suggests retained connection)

For clean residency change, selling the former-state home is best. If kept, limit visits and avoid using it as a primary residence.

State-specific attractions

Texas. Major employers (Tesla, Oracle, Meta Austin, Dell) plus strong startup ecosystem in Austin. Property taxes are high, which some consider a wash against income tax savings for homeowners.

Florida. Miami’s tech growth driven by financial services and crypto firms. No estate tax. Good infrastructure for travel. Hurricane insurance is expensive.

Nevada. Proximity to California for occasional visits. Low cost of living in Reno and surrounding areas. Water scarcity concerns in Las Vegas area.

Wyoming. Low population density appeals to some. Excellent LLC statutes for asset protection. Jackson area has high cost of living; rest of state is inexpensive.

Estate tax considerations

No-tax states generally also have no state estate tax. A $10M estate in California owes no California estate tax (California has no estate tax), same as Texas. But moving to a state without an estate tax is relevant if moving from:

• Massachusetts (estate tax above $2M)
• Oregon (estate tax above $1M)
• Washington (estate tax above $2.19M)
• Minnesota, Illinois, NY, CT, DC, HI, ME, MD, NE, RI, VT, WA (various state estate taxes)

For wealthy retirees facing state estate tax, moving to a no-tax state avoids both income and estate layers.

Practical tax planning sequence

For a senior IC planning a California-to-Texas move before IPO:

1. 18 months before IPO. Begin relocation planning. Review employer’s remote work policy.
2. 12 months before. Purchase or lease Texas residence. Begin physical moves.
3. 9 months before. Change driver’s license, voter registration, address on file.
4. 6 months before. Have spent majority of days in Texas. Files Texas residence documentation.
5. IPO event. File California part-year return (540NR) for the pre-move period. Federal return unchanged.
6. Post-IPO. Prepare for possible California residency audit; keep workday records.

Frequently asked

Can I keep my California job and move to Texas? If employer allows fully remote work from Texas, yes. If employer requires occasional office visits, Texas residency is maintained but California may claim trailing nexus for the days actually worked in California.

Do I need to sell my California home? Not legally required, but keeping it weakens the residency claim. If retained, document limited use and rent-out to tenants at market rate.

What about §6501 statute exposure? Federal 3-year statute applies. California’s 4-year statute applies on state returns. The state can audit for longer if substantial understatement or fraud is alleged.

Does IRMAA change based on state move? No. IRMAA is federal, based on federal MAGI. State taxes don’t affect Medicare premiums.

What’s the best no-tax state for families with school-age children? Varies by priorities. Austin, Texas, and Miami, Florida have strong school options and urban amenities. Jackson Hole, Wyoming is more limited but picturesque. Nevada’s Reno area is growing. Consider housing, schools, commute, and network in the destination before deciding.