No state imposes a true standalone exit tax, but about 16 states require withholding or a tax payment when a non-resident sells real estate within their borders, and a handful more use residency rules, deferred-income sourcing, and estate taxes that can function like one when you leave. So the honest answer to how many states have an exit tax depends on what you count. If you mean a tax triggered specifically by the act of leaving, the number is zero. If you mean state tax rules that bite hardest when someone moves or sells and goes, the number is closer to 16, plus a few more that reach you through other mechanisms.
Why the Count Isn’t a Single Number
“Exit tax” is a label the public and press use loosely. It gets applied to withholding at a property closing, income tax on stock options you earned years ago, estate taxes that depend on where you die, and aggressive residency rules that keep you on a state’s tax rolls after you think you’ve left. Each of these is a different mechanism, applies in a different set of states, and carries different dollar consequences. A reader shopping for a clean number won’t find one, because the states that tax departing residents don’t do it the same way or under the same name.
The 16 States With Non-Resident Real Estate Withholding
The closest thing to a real exit tax for most people is the withholding that kicks in when you sell property in a state where you no longer live. About 16 states impose some version of it. The logic is practical: if you sell real estate in a state, that state wants its share of the capital gain, and it doesn’t trust an out-of-state seller to file a non-resident return later. So it collects an estimated payment at closing.
New Jersey draws the most “exit tax” headlines. A non-resident selling real property there owes an estimated gross income tax payment at or before closing, equal to the state’s highest income tax rate (currently 10.75%) multiplied by the net gain, with a floor of 2% of the total sale price.1State of New Jersey Department of the Treasury. NJ Division of Taxation – FAQs on GIT Forms Requirements The 2% floor is what trips people up: you owe something even when the sale barely turns a profit. The payment is an estimate credited against your actual New Jersey liability, so overpayment can be refunded by filing a non-resident return.
The other states that use non-resident real estate withholding are California, Colorado, Georgia, Hawaii, Maine, Maryland, Mississippi, New York, North Carolina, Oregon, Rhode Island, South Carolina, Vermont, and West Virginia. Withholding rates generally run between 2% and 7% of the sale price or gain, with the exact method varying. Some states withhold on gross sale price, others on estimated gain. In every case the amount is an estimated payment, reconciled when you file a non-resident return.
Connecticut takes a slightly different route. Rather than withholding at closing, non-residents who sell Connecticut real property owe a capital gains tax on the recognized gain, reported on a non-resident return.2Connecticut State Department of Revenue Services. TSSN-33, Questions and Answers on Nonresident Capital Gains Tax The tax reaches land, vacation homes, rental property, and personal residences. The practical result matches the withholding states: gain on in-state property is taxable regardless of where you live when you sell.
California’s Proposed Billionaire Exit Tax
California has generated the loudest “exit tax” coverage, though the proposal in question is not yet law. The Billionaire Tax Act, aimed at California’s November 2026 ballot, would impose a one-time 5% tax on the total wealth of state residents worth $1 billion or more. The provision that earned the exit-tax label: it would apply retroactively to anyone who was a California resident as of January 1, 2026, leaving almost no window to establish residency elsewhere. Changing domicile typically takes months of documented steps, and tax attorneys have said escaping the proposal by moving would be nearly impossible for most people it targets.
Reports indicate billionaires including tech venture capitalist Peter Thiel and Google co-founder Larry Page have considered cutting California ties ahead of the measure. The proposal still has to gather signatures, reach the ballot, and win voter approval before it carries any force. No other state has advanced a comparable wealth-based proposal.
Income That Follows You After You Move
This is where movers get caught off guard. You relocate to a no-income-tax state, file a change of address, and then a stock option exercise or a bonus arrives that your old state claims the right to tax. Several states assert taxing authority over income earned or vested while you lived there, even when you receive it after leaving.
Stock Options and Restricted Stock
The most common trap involves equity compensation. Options granted while you worked in a state and later exercised as a non-resident are generally taxed by the former state in proportion to the time you worked there between grant and exercise. California, for example, allocates the income using the ratio of California workdays to total workdays during that period. Restricted stock follows the same logic: if shares vest after you leave, the income is taxable to the extent you performed services in the state between purchase and vesting.
Incentive stock options get slightly better treatment in some states. A qualifying disposition of ISO shares by a non-resident may not be taxed by the former state at all. A disqualifying disposition is treated like a non-statutory option exercise and runs through the same workday allocation.
Deferred Compensation
Non-qualified deferred compensation can create lingering obligations too. States can generally tax deferred compensation to the extent the underlying services were performed within their borders. Federal law carves out an important exception for retirement income: under 4 U.S.C. ยง 114, no state may tax the retirement income (401(k) and IRA distributions, pensions, 403(b) and 457 payments, military retired pay, and qualifying installment payouts from nonqualified plans) of someone who doesn’t live there.3Office of the Law Revision Counsel. 4 USC 114 – Limitation on State Income Taxation of Certain Pension Income Lump-sum nonqualified payouts and stock option income don’t fit that federal shelter and remain exposed to source-state taxation.
The 183-Day Rule and Statutory Residency
Even after you move, your former state can argue you never really left. Many states use a day-counting threshold, often around 183 days, to determine statutory residency. If you keep a home in the state and spend more than the threshold number of days there, the state can treat you as a full-year resident and tax all your income, not only the income sourced to that state.
New York’s version is particularly aggressive. If you maintain a “permanent place of abode” in New York and spend 184 or more days in the state during the year, you’re treated as a resident for tax purposes even when domiciled elsewhere. Any part of a day counts as a full day.4New York State Department of Taxation and Finance. Frequently Asked Questions about Filing Requirements, Residency, and Telecommuting for New York State Personal Income Tax A vacation home or an apartment where family stays can be enough to trigger the rule, even if you barely use it. States like New York, New Jersey, California, and Connecticut are known for aggressive residency audits, and the burden of proof falls on you to show your new state is your genuine home. Selling or giving up the former residence is one of the strongest moves available for cutting the tie.
States With Estate and Inheritance Taxes
Estate and inheritance taxes aren’t triggered by moving, but they’re triggered by dying, and where you’re domiciled at death decides which state gets to tax your estate. That makes them part of the broader “exit” calculation for retirees choosing where to settle.
Twelve states and the District of Columbia impose their own estate tax, each with its own exemption. The federal estate tax exemption rose to a baseline of $15 million per person starting January 1, 2026, under the One Big Beautiful Bill Act, but state exemptions sit far lower. The 2026 thresholds:
- Oregon: $1,000,000
- Rhode Island: $1,774,583
- Massachusetts: $2,000,000
- Washington: $2,193,000
- Minnesota: $3,000,000
- Illinois: $4,000,000
- District of Columbia: $4,715,600
- Maryland: $5,000,000
- Vermont: $5,000,000
- Hawaii: $5,490,000
- Maine: $6,800,000
- New York: $6,940,000
- Connecticut: $13,610,000
Oregon’s $1 million threshold is the lowest in the country. New York adds a twist: if an estate exceeds the exemption by more than about 5%, the entire estate becomes taxable from the first dollar, not just the amount over the threshold.
Five states impose an inheritance tax, paid by the person receiving the assets rather than the estate itself. Rates usually depend on the beneficiary’s relationship to the deceased, with spouses and direct descendants exempt or taxed at much lower rates. Those states are Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Iowa phased out its inheritance tax effective January 1, 2025. Maryland is the only state with both an estate tax and an inheritance tax, which can result in the same assets being taxed twice.
The Federal Expatriation Tax Is a Separate Matter
One real exit tax does exist, but it operates at the federal level and has nothing to do with moving between states. Under IRC 877A, a “covered expatriate” who renounces U.S. citizenship or ends long-term permanent residency is treated as having sold all worldwide assets at fair market value on the day before expatriation, and any resulting gain is taxable.5Internal Revenue Service. Expatriation Tax
You qualify as a covered expatriate if your average annual net income tax liability over the five years before expatriation exceeds an inflation-adjusted threshold ($206,000 for 2025), your net worth is $2 million or more, or you fail to certify full tax compliance for the preceding five years on Form 8854.5Internal Revenue Service. Expatriation Tax An exclusion amount shelters a portion of the deemed gain, but the bill for wealthy expatriates can be substantial. This federal provision is often confused with state exit taxes in public discussion, though the triggers are entirely different.