According to migration data released last week by the Internal Revenue Service, Washington state experienced a net loss of 18,798 taxpayers and their families from 2021 to 2022. This loss resulted in a decrease of almost $1.66 billion in taxable income, despite Washington not having a state income tax.
Washington State experienced the ninth worst net loss of taxpayers in the United States during the specified time period.
According to the IRS data from last year, Washington experienced a net loss of approximately 14,000 individuals. However, the state gained $200 million in adjusted gross income.
According to the latest data from the IRS, there was a net decrease of almost 19,000 taxpayers as 222,533 taxpayers and their dependents left the state, while 203,735 individuals entered the state.
Washington State has experienced a significant loss of $14.62 billion in adjusted gross income due to taxpayers moving out of the state. On the other hand, the inflow of taxpayers has resulted in a gain of $12.96 billion in adjusted gross income. As a result, there is a difference between these two figures, which accounts for the loss of $1.66 billion in taxable income.
Washington saw a significant influx of taxpayers from California in terms of domestic migration. According to data, over 44,160 taxpayers and their dependents moved from California to Washington, bringing with them an impressive $3.815 billion in adjusted gross income.
On the other hand, California became the top choice for 29,096 individuals who left Washington. They took with them over $2.97 billion in adjusted gross income, making it the most popular destination for those who left the state.
In Washington, there is no income tax, but the state does have a capital gains tax that applies to the sale or exchange of long-term capital assets like stocks, bonds, and business interests. The tax rate is 7% and it only covers gains that surpass $262,000, which has increased from $250,000 for the 2022 tax year. It is important to note that this tax does not apply to real estate and the minimum threshold is linked to inflation.
In 2021, the capital gains tax was approved by the Legislature and signed into law by Gov. Jay Inslee. It only came into effect after the state Supreme Court upheld it in a ruling last year. The first payments are due in April 2023.
Come November, voters will have the opportunity to weigh in on Initiative 2109, which seeks to repeal the capital gains tax.
According to the IRS, Florida welcomed the largest influx of residents compared to any other state, with a whopping 245,334 new residents. This resulted in a net increase of almost $36 billion in adjusted gross income, all thanks to domestic migration.
California experienced a significant loss of 307,117 taxpaying families who carried an adjusted gross income of over $23 billion to other states.
