Washington has no state income tax (0%), while California has progressive rates up to 13.3%. A $150,000 earner saves approximately $11,162 per year by moving from California to Washington. Property taxes favor California (0.73% vs WA's 0.94%), thanks to Proposition 13, but Washington's median home values are significantly lower ($550K vs CA's $800K coastal median), making homeownership more affordable despite the higher rate. The tech corridor migration is massive: 60,000+ people moved from California to Washington between 2020-2023, driven by remote work flexibility, Amazon/Microsoft hiring, lower cost of living, and zero income tax. Seattle's cost of living is 22% cheaper than San Francisco. Washington does have a 7% capital gains tax on gains over $262,000, but this is still far lower than California's 13.3% rate on capital gains, making WA attractive for IPO windfalls and stock option exercises.

By CountryTaxCalc Research Team

Last Updated: March 2026

The Big Picture

🌲 Washington

0%

No Income Tax

No state income tax (7% capital gains on $262K+)

🌴 California

13.3%

Highest in Nation

10 progressive brackets from 1% - 13.3%

Typical Annual Savings

At $150,000 income:

$11,162

That is $930/month back in your pocket!

Tax Savings by Income Level

IncomeWA TaxCA TaxSavings10-Year
$50,000 $0$1,516$1,516$15,160
$75,000 $0$3,641$3,641$36,410
$100,000 $0$5,762$5,762$57,620
$150,000 $0$11,162$11,162$111,620
$250,000 $0$22,012$22,012$220,120
$500,000 $0$59,762$59,762$597,620

Washington Pros and Cons

✅ Pros

  • 0% state income tax (no W-2 withholding, no state tax return)
  • Tech hub (Amazon, Microsoft, Boeing headquarters)
  • Seattle cost of living 22% cheaper than San Francisco
  • Lower median home price ($550K vs CA $800K coastal)
  • Capital gains tax only 7% on gains over $262K (vs CA 13.3%)
  • No franchise tax (business-friendly)
  • Strong tech salaries (Amazon/Microsoft comp competitive with Bay Area)
  • Beautiful nature (Puget Sound, Cascades, Olympic Peninsula)

❌ Cons

  • Higher property tax rate (0.94% vs CA 0.73%)
  • High sales tax (6.5-10.5%, among highest nationally)
  • Seattle rain (152 rainy days/year—grey October-May)
  • 7% capital gains tax on gains over $262K (only since 2022)
  • Limited sunshine (58 clear days/year vs CA 300+)
  • Housing costs still high in Seattle metro (though cheaper than SF/LA)
  • Traffic congestion in Seattle (I-5 corridor brutal)

California Pros and Cons

✅ Pros

  • Proposition 13 locks in property tax (0.73% + 2% annual cap)
  • Perfect weather year-round (mild winters, warm summers, 300+ sunny days)
  • Tech hub (Silicon Valley, San Francisco, Los Angeles)
  • World-class universities (UC system, Stanford, Caltech)
  • Beach and mountain access (surf and ski same day)
  • Larger economy (more diverse job market)

❌ Cons

  • Highest income tax in nation (13.3% top rate)
  • Extremely high cost of living (SF/LA among most expensive)
  • Housing crisis ($800K+ median in coastal areas)
  • Aggressive tax enforcement (FTB audits common for leavers)
  • Wildfire risk and insurance costs rising
  • 13.3% capital gains tax (brutal for IPO/stock events)
💡

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Frequently Asked Questions

Q: How much do I save by moving from California to Washington?

Washington has no state income tax, so savings equal your entire California tax bill. At $75K income: save $3,641/year. At $100K: save $5,762/year. At $150K: save $11,162/year ($930/month). At $250K: save $22,012/year. At $500K: save $59,762/year. The higher your income, the more dramatic the savings—California's progressive rates hit 9.3% at $61K (single) and 13.3% at $1M+, while Washington stays at 0%.

Q: How many people moved from California to Washington?

Over 60,000 people moved from California to Washington between 2020-2023, driven by the tech corridor boom (Amazon, Microsoft hiring aggressively), remote work flexibility (keep CA salary, cut state tax to 0%), and lower cost of living. Seattle's tech ecosystem rivals the Bay Area but with 22% lower cost of living. The migration accelerated post-COVID as remote work normalized.

Q: Is Seattle cheaper than San Francisco?

Yes, significantly. Seattle's cost of living is 22% cheaper than San Francisco. Housing drives most of the difference—median home in Seattle metro is ~$550K vs $1.2M+ in SF. Combined with 0% state income tax vs CA's up to 13.3%, a $150K tech worker in Seattle has far more purchasing power than in SF (save $11,162/year on taxes alone, plus lower housing/living costs).

Q: Which state has lower property tax: Washington or California?

California has lower property tax rates (0.73% vs WA's 0.94%), thanks to Proposition 13 which caps annual increases at 2% and locks in your tax basis at purchase price. However, Washington's median home values are much lower ($550K vs CA's $800K+ coastal median), so annual property tax bills are often comparable despite the higher rate. CA wins on rate, WA wins on affordability.

Q: Does Washington have an income tax?

No, Washington has no state income tax. You pay 0% on W-2 wages, self-employment income, and ordinary income. However, Washington does have a 7% capital gains tax on gains over $262,000 per year (enacted in 2022). This only affects investors and entrepreneurs with large stock sales or IPO events. For W-2 employees, Washington is a pure 0% income tax state.

Q: What is Washington's capital gains tax?

Washington charges 7% on long-term capital gains over $262,000 per year (indexed annually). This affects stock sales, crypto sales, business sales, and IPO events—but only on gains above the threshold. California taxes all capital gains as ordinary income up to 13.3%. Example: $1M IPO windfall = WA tax $51,660 (7% on $738K above threshold) vs CA tax $133K (13.3%)—save $81,340 by being a WA resident before the liquidity event.

Q: Do I pay California taxes if I work remotely for a California company from Washington?

No, as long as you're a Washington resident performing work physically in Washington. California cannot tax non-residents on income earned outside California. However, California's FTB may audit you to verify you truly live in Washington. Keep documentation: WA lease, utility bills, driver's license, voter registration, and time logs showing days in each state. High earners leaving CA should expect scrutiny.

Q: Can California still tax me after I move to Washington?

Yes, if the California Franchise Tax Board determines you're still a California resident. They track days spent in CA (safe harbor: <183 days/year), driver's license, voter registration, professional licenses, and property ownership. To safely leave, establish genuine Washington residency: get WA license, register to vote, open local bank accounts, lease/buy a WA home, and minimize CA ties. High earners should document everything—FTB audits are common and aggressive.

Q: Is it worth moving to Washington just for taxes?

For tech workers earning $100K+, the combination of 0% income tax ($5,762-$59K/year savings), 22% lower cost of living vs SF, and strong tech salaries (Amazon/Microsoft comp competitive with Bay Area) makes Washington financially compelling. The lifestyle trade-off is weather: Seattle has 152 rainy days/year (grey October-May) vs California's 300+ sunny days. If you can tolerate the rain, WA offers similar tech careers with dramatically better finances.

Q: How does Washington tax retirement income?

Washington does not tax retirement income. Social Security, pensions, 401(k) withdrawals, IRA distributions—all 0% state tax. California taxes all retirement income except Social Security (which is federally exempt). For retirees with significant pension/401(k) income, Washington is one of the best states in America. A retiree with $80K/year in retirement income pays $0 in WA vs $3,500+ in CA.

Q: What are the downsides of Washington compared to California?

Weather is the big one: Seattle has 152 rainy days/year (grey, drizzly October-May) vs California's 300+ sunny days. Higher property tax rate (0.94% vs 0.73%). High sales tax (6.5-10.5%). The new 7% capital gains tax on gains over $262K affects investors. Limited beach culture (Puget Sound is cold, not California surf). If you value sunshine, beach lifestyle, and California's massive economy over tax savings, CA may be worth the cost.

Q: How does Seattle compare to San Francisco for tech jobs?

Seattle is a top-tier tech hub (Amazon HQ, Microsoft HQ, strong startup scene) with salaries competitive with the Bay Area. The combination of 0% state income tax, 22% lower cost of living, and lower housing costs ($550K median vs SF $1.2M+) means Seattle tech workers often have higher take-home pay and better purchasing power than SF counterparts. The trade-off is weather (rain) and slightly smaller ecosystem (fewer startups/VCs than SF).

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