Billionaire Amazon founder and chairman Jeff Bezos announced his move from the Seattle area to Florida in late 2023 in a sentimental Instagram post, featuring a video his dad took of him at Amazon’s first “office” and Bezos explaining how he wanted to be closer to his parents, who’d recently moved back to Miami. Plus, Bezos noted, operations of his rocket company Blue Origin were increasingly shifting to Cape Canaveral. Not mentioned: That he would save a bundle in taxes. This year alone, he likely saved an estimated $1 billion.
Bezos, the world’s second-richest person, sold $13.6 billion worth of Amazon stock so far this year, more than the dollar amount sold by any other U.S. billionaire who’s required to disclose transactions publicly. Before this year’s sales, it had been two years since Bezos had last sold stock. His pause began in January 2022, the same month Washington state, where he lived at the time, first enacted a 7% state tax on long-term capital gains of more than $250,000, which would include Amazon stock that Bezos has held for more than one year.
It soon became more evident that Bezos was getting ready to make an official move to Florida: In the latter half of 2023, he splashed out $234 million to buy three mansions on Indian Creek, a manmade barrier island known as Florida’s billionaire bunker; registered to vote there; and filed a previously unreported declaration of domicile in the state—three critical steps to establish legal residency in Florida, which famously doesn’t impose income, capital gains or estate taxes.
“He set himself up in a way where Washington can’t say, ‘You’re still here, pay us some more money,’” says Edward Renn, a private client and tax lawyer at global law firm Withers.
Before 2022, Washington was one of eight states without a capital gains tax. Now it’s one of two states (the other is Minnesota) that tax capital gains—like stock or real estate sales—at a higher rate than ordinary income (like a salary). Since 2022, several groups have challenged the Washington state law. The Freedom Foundation—a think tank that’s received funding from the billionaire Koch and DeVos families—filed an appeal to the U.S. Supreme Court in August 2023, but the Court declined to take the case in mid-January 2024, effectively upholding the law.
Just three weeks later, on February 7, Bezos began selling shares, offloading $8.5 billion worth of Amazon stock in February alone. Then, in March, he filed a trading plan with the Securities and Exchange Commission to sell an additional 25 million shares—about 3% of his Amazon stake. He completed those sales last month, for gross proceeds of an additional $5.1 billion.
As a result, Bezos, who has been a prolific seller in the past, has sold more shares in dollar terms this year than ever before. He’s likely selling to diversify his holdings; about $210 billion of his roughly $245 billion estimated fortune comes from his current 9% stake in Amazon. Bezos may also have sold to pay for other purchases or investments, including the $500 million he spent on eight homes in the last five years, another reported half billion dollars on his yacht, Koru, and the hundreds of millions of dollars he’s poured into Blue Origin (he is the sole investor and owner) over the years. He’s also invested in more than 125 startups, according to PitchBook, including chipmaker Tenstorrent and robot firm Figure AI.
Had Bezos remained in Washington, his 2024 share sales would have resulted in a $954 million state capital gains tax bill. That amount would have exceeded Washington state’s net collections from the tax in the fiscal year that ended in June, which totaled $848 million. So far this fiscal year (from June to November), the state has collected $361 million in capital gains taxes, according to a spokesperson for the Washington Department of Revenue. Washington state spends this money on child care, education and school construction, meaning there is much less to spread around.
It’s not like Bezos isn’t paying any taxes; he very likely owes $3.2 billion in taxes to the federal government from those share sales, based on the top capital gains tax rate of 20% plus a 3.8% net investment income tax—barring any offsets from charitable donations and other tax-minimizing moves he and his money managers may have employed. Bezos has announced more than $400 million in charitable giving in the past year and gave $820 million worth of Amazon shares to nonprofit groups.
There is a chance that Washington state could still ask Bezos to pay taxes there, even though he appears to have made all the right moves to switch his residency. The state could try to cite evidence that he has not fully moved away, according to Brian Carter, a tax partner at law firm Plante Moran who runs its family offices group. The kind of evidence officials might try to dig up includes whether or not he still has a primary care physician in state or holds any property; based on Forbes’ review, he still appears to own at least three homes in Washington. There is no record of a sale, but he could have unloaded it in an off market transaction. A representative for Bezos did not respond to a request for comment, and the Washington Department of Revenue representative declined to comment on Bezos’ tax payments, citing confidentiality laws.
Bezos is far from the only billionaire who’s moved in search of more tax-friendly skies. Over the past two decades, Forbes has measured a dramatic uptick in members of the Forbes 400 list of richest Americans who moved to Texas and Florida, states with no income, capital gains or estate tax. The number of Forbes 400 members living in Florida more than doubled from 23 to 54 between 2003 and 2024, as the likes of hedge fund titans David Tepper and Ken Griffin, Paychex founder Tom Golisano and Interactive Brokers’ Thomas Peterffy all departed for the Sunshine State.
Plante Moran lawyer Carter, who’s based in Chicago, says he’s seen many of his clients moving to Florida—especially when they’re in a later stage of their career. “A lot of them have deep ties to the state. It’s not a decision people just make on a whim.” Bezos, for example, went to high school there, and his parents live in the state.
Still, Carter says that taxes are always a factor if a wealthy individual is already thinking about moving states. The ultrawealthy have a playbook of maneuvers to lower their tax bill, including deductions due to charitable giving, taking all their compensation in shares of company stock instead of a salary to avoid reporting income (on which tax would be owed for the year it was paid), and borrowing against shares of their company instead of selling them. While Bezos has never disclosed any borrowing against his Amazon shares, he managed to pay no income tax in 2007 and 2011 and maintain an effective tax rate of less than 1% from 2014 to 2018, according to leaked tax filings reported by ProPublica.
For all the talk about wanting to pay fewer taxes, though, many billionaires are still working to curry favor with the federal government, as their companies (including Bezos’ Blue Origin and Amazon) can profit from friendly regulations and government contracts. Bezos is certainly one of them: he controversially killed his Washington Post’s endorsement of Kamala Harris a week before the presidential election and a day before executives of his space company Blue Origin met with Trump, and Bezos immediately congratulated Donald Trump on his election victory in social media posts. Trump has said he’s meeting with Bezos on Thursday, December 19.
Read the full article here
