Moving to Florida? Why Your Former State May Still Have a Tax Claim

A move to Florida can improve future state tax exposure. It does not, by itself, erase your prior state tax footprint.

That distinction matters now because state wealth and high-income taxes are becoming part of the election-year conversation, with California’s proposed billionaire tax back in view and Washington’s high-income tax debate still unsettled. If you are weighing a relocation, the planning question is not just “Where will I live next?” It is also “What tax authority might still follow me after I leave?”

Below is the record as it stands, followed by our analysis of what it means in practice.

Factual background

Two separate developments are driving the current discussion, and they should not be treated as the same thing.

In California, the Franchise Tax Board published a bill analysis for AB 259, described as the Wealth Tax Act, during the 2023–2024 legislative cycle. The analysis states that the proposal was aimed at taxing extremely wealthy individuals and outlines a framework for a California wealth tax proposal. That is a proposal, not a currently enacted wealth tax, based on the source in this packet. California Franchise Tax Board, Bill Analysis, AB 259, Wealth Tax Act, 2023–2024 legislative session: https://www.ftb.ca.gov/tax-pros/law/legislation/2023-2024/AB259-011923.pdf

Also in California, the Franchise Tax Board maintains a public meetings page that can be used to monitor agency activity and developments, but that page does not itself establish enactment of the proposed wealth tax. California Franchise Tax Board, Meetings: https://www.ftb.ca.gov/about-ftb/meetings/index.html

In Washington, the packet indicates that a millionaire-tax repeal effort or related challenge is in discussion. However, the Washington materials referenced in the packet were not read in full and include search-result-level notes only. Because of that, we cannot responsibly state the enacted status, repeal status, or technical details of any Washington millionaire tax from this packet alone. We can only say that Washington’s high-income tax policy is being discussed as a current issue, and that its status should be verified before acting.

Parties

The key parties are straightforward:

California lawmakers and tax administrators, specifically in relation to AB 259 and the Franchise Tax Board’s bill analysis.
Washington lawmakers, officials, and voters, to the extent a high-income tax or repeal effort is being debated there. The packet does not provide enough verified primary text to go further.
High-income households considering relocation, especially those looking at Florida because Florida does not impose a state individual income tax.
Former states of residence, which may still review prior-year returns, residency status, sourcing of income, or exit-year facts even after a move.

The issue

The client issue is not simply whether California or Washington will tax high-income individuals more aggressively.

The real issue is timing and jurisdiction:

Are you relocating before a proposal becomes law, after a law is enacted, or while rules are unsettled?
What tax years remain open in your current state?
Will the state argue that you remained a resident longer than you thought?
Does part of your income remain connected to the old state even after you relocate?

Florida can improve the tax treatment of future income because it does not impose a state individual income tax. But a move does not automatically prevent:

prior-year audits,
part-year resident filings,
disputes over the date residency changed,
or continuing tax treatment for income still sourced to the former state.

That last point is especially important for owners, investors, and executives whose financial life is spread across multiple entities and states.

Current status

Here the record needs to stay precise.

California

As of the California FTB bill analysis in the packet, AB 259 is a proposed Wealth Tax Act. The analysis discusses how the proposal would work and confirms the policy direction: higher taxation aimed at extremely wealthy individuals. The packet does not support saying that California has enacted a billionaire tax. Source: https://www.ftb.ca.gov/tax-pros/law/legislation/2023-2024/AB259-011923.pdf

Washington

The packet says Washington’s millionaire tax is facing challenges and that repeal discussions have gained momentum. But the packet does not include a fully read primary source confirming the exact legal status. So the careful position is this: Washington’s high-income tax treatment is a live policy issue, but the current legal posture must be separately confirmed before making a relocation or liquidity decision.

That distinction matters because clients often hear “proposal,” “law,” “challenge,” and “repeal” used loosely. Those are not interchangeable terms.

Technical analysis

From an MFS planning standpoint, the central technical issue is not the headline tax proposal. It is the mechanics of residency, timing, and sourcing.

1. A state tax proposal and a residency dispute are different risks

A new high-income or wealth tax proposal affects what may apply going forward if enacted. A residency dispute concerns whether your former state can still treat you as taxable for a period after you believe you left.

Those are separate analyses.

You can successfully move to Florida and still face questions from the prior state about:

where you actually lived during the transition year,
where your spouse and dependents were located,
where your primary home remained available,
where business activity continued,
and whether key financial ties were really severed.

The packet does not provide detailed statutory residency tests, so we will not invent them here. But the practical point remains: the move date on your calendar is not the only date that matters.

2. The exit year is usually the most sensitive year

When a client relocates, the year of departure often creates the highest audit exposure because it includes mixed facts:

time spent in more than one state,
compensation earned across different periods,
deferred income,
business distributions,
capital events,
and possible ambiguity over domicile.

If a state later argues that the move happened later than reported, the tax cost can extend beyond one return. It can affect estimated payments, penalties, and the tax treatment of income recognized during the transition period.

3. Asset sales and liquidity events should not be planned in isolation from the move

For high-income households, the economic stakes are often concentrated in one or two events:

a business sale,
a large bonus,
equity vesting,
a concentrated stock liquidation,
a carried-interest or partnership distribution,
or a real estate gain.

If those events occur before residency is clearly changed, the former state may still have a basis to tax some or all of the income, depending on its rules and sourcing concepts. The packet does not support state-by-state sourcing detail, so we are keeping this at the planning level. But financially, this is where the difference between “we moved” and “we completed the move properly” becomes expensive.

Practical implications

Here is what this means for a household considering Florida now.

Your relocation timeline should be tied to tax years, not just lifestyle goals

If state tax policy is shifting, moving in December versus moving earlier in the year can produce very different filing and evidentiary outcomes. The planning window should consider:

expected income recognition dates,
transaction closings,
entity distributions,
and the amount of documentation available to support the move.

Do not treat Florida residency as self-proving

Florida can be attractive from a tax standpoint, but former high-tax states may still examine whether the move was substantive. In practice, households need a clean factual record, not just a mailing address change.

Washington and California should be analyzed separately

California’s development in this packet is a documented proposal. Washington’s development in this packet is a reported issue, but not fully verified at the same level. If you have exposure to both states through residence, business operations, or investment activity, do not assume the same answer applies in both places.

Election-year noise can create rushed decisions

Tax proposals often generate urgency. Sometimes that urgency is justified. Sometimes it causes clients to move before the legal, entity, mortgage, trust, and cash-flow consequences are coordinated. A rushed move can save future state tax and still create avoidable prior-state controversy.

Caveats

A few boundaries are important.

First, the California source in this packet supports discussion of a proposed wealth tax only. It does not support saying that California already imposes that billionaire tax. Source: https://www.ftb.ca.gov/tax-pros/law/legislation/2023-2024/AB259-011923.pdf

Second, the Washington points in the packet are not supported by fully read primary materials here. That means the existence of current political or legislative debate may be noted, but the exact legal status should be confirmed from primary Washington sources before planning around it.

Third, this article addresses the tax-planning issue at a strategic level. It does not attempt to restate detailed residency rules, sourcing rules, or enforcement procedures that are not contained in the packet.

What to monitor next

If this issue affects you, monitor four things in order:

Whether California’s proposal advances beyond the bill-analysis stage The FTB analysis shows policy intent, but proposal and enactment are different milestones.
Whether Washington’s high-income tax debate results in confirmed legislative or ballot developments At the moment, this packet does not provide enough verified text to go further.
Your own move date relative to major income events This is often the biggest controllable variable.
Whether your former state could still argue ongoing residency or state-source income That is where many post-move surprises begin.

For households with large gains, business income, or multistate operations, relocation planning should happen before the move and before the transaction, not after both are complete. If you want to review the tax side of a planned move, you can start here: Speak With an Advisor.

Sources

California Franchise Tax Board, Bill Analysis, AB 259; Wealth Tax Act: https://www.ftb.ca.gov/tax-pros/law/legislation/2023-2024/AB259-011923.pdf
California Franchise Tax Board, Meetings: https://www.ftb.ca.gov/about-ftb/meetings/index.html