Musk is reportedly going to leave California, the state with the highest income tax, and move to Texas where there is no such tax.
Uprooting and moving from California to Texas is definitely not unheard-of, especially since the Golden State has the country’s highest income tax, while the Lone Star State does not impose a personal income tax. This is believed to be the main reason why Tesla founder and CEO, Elon Musk, is reportedly planning such a move.
Texas is one of the seven US states that don’t currently have an income tax - the others are Alaska, Florida, Nevada, South Dakota, Washington and Wyoming. In Texas, the ban on a personal income tax and the people overwhelmingly voted for a revamped ban in late 2019 - they made it even more difficult for future state officials to try to reintroduce it at a later date. In other words, there is little chance it could easily be changed.
Elon Musk announced back in May of 2020 that he was going to list all of his properties in California for sale, and he also announced those close to him that he was indeed planning to leave for Texas. Now, where his personal residence is doesn’t matter as much, but what does matter (and what could affect many people)) is whether or not he will also take Tesla with him.
Tesla’s headquarters is located in Palo Alto, its main production facility is in Fremont and SpaceX is based out of Hawthorne. Moving all these companies to Texas, as you can imagine, would be a real hassle, but it would also allow the companies to keep the 13.3 percent income tax they would otherwise have to pay in California.
As you probably know, Tesla is building another of its Gigafactories (the fifth one) just outside Austin, Texas, and Musk seems especially pleased about the location because it allows for future expansion. This means that as the plant’s needs change/increase, Tesla will be able to increase the size of the complex without too much hassle, and it will end up being a much more orderly place than the seemingly chaotic Fremont facility. Tesla intends to assemble the Model 3, Model Y, the Semi and the Cybertruck at this location.
Musk was also spared from paying tens of millions of dollars in local property tax and this further spurred him to build the plant in Texas. So far, Musk and Tesla have not made any official statements announcing the move, but he did announce he had gotten a Texas driver’s license earlier in the year, in July, further hinting that he may relocate there.
It is also worth pointing out that Musk also mentioned selling all material possessions, and living a different kind of life. So even if he moves to Texas, he may not purchase many properties for him to live in - we’ll have to wait and see how this progresses and if he does, indeed, also intend to move Tesla from California to Texas, as is being speculated.