Are you no longer interested in staying in the Golden State? The state of stars and magnificence! Well, whatever your reason may be to pack your bags, you need to make sure that you have understood everything about the California Exit Tax. That’s right! The government of California has proposed a new tax, and this has generated significant buzz among the rich and high-net-worth people living in the state. 

Here in this blog, you will be completely informed on the California Exit Tax, with its structure and other details you should know if you are moving out of the state. 

What is the meaning of the California Exit Tax?

The first thing that you are probably wondering is Did California Exit Tax pass? Well, the simple answer to this question is that this tax, which is not even officially named, is only a proposed tax, which means that as of July 2025, there is no official California Exit Tax that you need to pay if you choose to exit the state. 

However, you should also keep in mind that the tax has been proposed, which means there are discussions happening regarding the tax, which is said to target and impact individuals with high net worth in the state. As a resident of California, and even the United States of America, you need to know about the main points that were raised in this proposal. 

• The tax will only be levied on individuals whose entire net worth is above $30 million, and $15 million if married couples are filing separately.
• The tax has proposed a 0.4% rate on the net worth that exceeds the mentioned thresholds.
• If enacted, the tax will be applied to people up to 10 years after they have left the state.
• The tax includes numerous assets, like stocks and investments. However, keep in mind that California real estate will be taxed separately.
• The tax has been proposed with the aim of closing loopholes in capital gains tax regulations.

The main aim of the tax is to retrieve revenue and avoid capital gains tax avoidance. However, you do not need to panic too much, as the tax is still being discussed. 

Who is subject to pay the California Exit Tax, if implemented?

Though California doesn't have an official "Cal exit tax," the term describes ongoing tax obligations for people who quit the state with significant financial ties. This most affects people who have amassed great riches and those who have resided here for decades. Now, there are different people who will be obliged to pay this tax under the following requisites. 

• Married individuals who file separately have a net worth of above $15 million, while single people have a net worth of more than $30 million.
• Real estate, commercial operations, or investments make up a good share of California's revenue.
• usually spanning nine of the prior ten years, a long-term residency requirement

Even after you leave, you can still be responsible for California taxes on the following items:

• Capital gains came from California real estate sales.
• Income from California-based sources
• Earnings from enterprises located inside the state

Before you depart, think about selling your California home, ending any commercial contacts you might have in the state, modifying your legal records and residency status, and seeking tax professional individualised advice to minimise any possible tax obligations.

Useful and Effective Strategies to Minimise your Tax Liability when leaving California 

While there is no Exit tax California at the moment, if implemented, this tax can affect you a lot, and this is why you need to be informed on certain techniques that you can use to ensure that your tax liability is to the minimum. 

• We recommend the transfer of all investments and financial accounts to the new state where you are moving to before you officially change your domicile.
• You can also try establishing trusts in states that are more tax-friendly.
• Evaluate and examine the timing of your asset sales to ensure that you have fewer tax implications.
• Structure your business in such a way that you minimise California-source income.

This is the basic information that you are required to know about the California Exit Tax, also known as Ca Exit Tax, even if the tax has not been finalised yet. 

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