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Elon Musk moves to Texas

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Re: Elon Musk moves to Texas

#161

Post by readams »

tidepod12 wrote: post #113
ashtonkem wrote: post #25

Earlier quoted context omitted.

I have no direct experience in this, but an acquaintance of ours whose startup exited successfully is similarly leaving CA for tax reasons. My light understanding is that CA has some pretty tight rules around how often you can work in CA before you automatically become a resident for the purposes of taxes. If they find out that you’ve worked in CA too much I presume they’ll try and tax your yearly income.

The distinction CA (and other states) make is between being a "resident", "part-time resident", or "nonresident". If you are classified as a resident or a part-time resident, you pay CA income tax on all of your income, even if it was earned from work that happened outside of CA. If you are a nonresident, you pay CA taxes only on the income that was earned from work happening in CA. It's possible this move might help…

This is why he sold all his properties. He undoubtedly has good tax attorneys and is doing everything required to be a nonresident. I wouldn't be that surprised if he decided to just never set foot in California again.

Re: Elon Musk moves to Texas

#162

Post by matwood »

toomuchtodo wrote: post #88
P_I_Staker wrote: post #72

Earlier quoted context omitted.

I'd buy a car through Carvana (in principle), but I don't recall the prices being very attractive. It was the same or slightly more than what was available at traditional local places.

It appears folks are willing to pay a premium for a superior experience.

Exactly. It's been awhile since I've bought cars, but I bought my last few cars through Carmax for this reason. The prices were not the lowest, but were reasonable. The process was about as simple as it could be though.

Contrast this with my first car buying experience where the 'finance guy' told me to 'get the fuck out of his office' when I explained him how he was manipulating the loan date payment, and price to charge me more. The deal still got done, but it was with the sales guy running between me and the finance guy basically relaying me saying no.

Re: Elon Musk moves to Texas

#163

Post by hobofan »

jowday wrote: post #14

Isn't the actual listed location of residence more a formality for a billionaire like Musk? I presume he'll still rent residences in LA and the Bay Area considering he'll be back and forth for business related to Tesla and SpaceX. This seems like he's renting a place in Texas and making a big deal out of 'moving there' to make a point about California's regulatory environment.

Are US tax agencies that easily fooled? From what I know in Europe, you generally have to pay tax in the place where you reside more than 50% of the year (additional taxes may apply for secondary residences, but that's very regional). It's fairly common for a tax agency of one country to demand proof that you actually moved and physically reside in another country so that they don't double-tax you, so you better have documented the travels between both countries and kept as many receipts as possible.

Re: Elon Musk moves to Texas

#164

Post by lotsofpulp »

ekianjo wrote: post #9
bryanlarsen wrote: post #4

Criticizes California for excessive regulation, then moves to a state where it's illegal for Tesla to sell its cars. https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes#T...

When you mention excessive regulations you might want to look at all regulations, not just cherry pick one of them to make a point.

Yes, perhaps also Texas regulations prohibiting marijuana, assisted suicide, proper sex education in public schools, no liquor permits for public traded companies, restrictions on mail in voting, etc.

Re: Elon Musk moves to Texas

#165

Post by majormajor »

busterarm wrote: post #62
apcragg wrote: post #50

Earlier quoted context omitted.

Failing budget? I get that it's super popular right-wing talking point but it just hasn't been true for years. Prior to COVID (which has decimated state budgets Red and Blue) California had a huge surplus and massive rainy-day fund.

California has a $54B deficit this year. It's been all over the news, including very left-wing sources like NY Times and Politico. The state _projected_ a surplus and was off by an entire order of magnitude into the red. The state has been campaigning to Congress all year for about $14B in bailout money.

I haven't seen that all over the news myself.

The 54B seems to be a projection from May?

I saw stuff like https://www.latimes.com/california/story/2020-06-29/californ... and https://www.sacbee.com/news/politics-government/capitol-aler... which seems like there will be a surplus this year but people aren't sure they're out of the woods just yet, which seems reasonable.

Re: Elon Musk moves to Texas

#166

Post by perryizgr8 »

nouveaux wrote: post #146
perryizgr8 wrote: post #98

Earlier quoted context omitted.

Aren't those federal subsidies though?

California subsidized every Tesla sold. I'm not complaining about it but it should be on record that California helped to give Tesla a boost. It was definitely the right move. I can't think of another state in this country where Tesla would have thrived nearly as well as California. Do you think Tesla would have done well in Texas back in 2003? All those oil guzzlers would have laughed Elon Musk out of the state.

I'm just asking. I didn't know Tesla was getting subsidies from CA on top of the federal stuff.

Re: Elon Musk moves to Texas

#167

Post by pjettter »

jcampbell1 wrote: post #56
nickthemagicman wrote: post #27

Earlier quoted context omitted.

What are unrecognized capital gains?

Let’s say you are a painter, and you paint 20 pictures and sell 10 for 100,000 each. You pay taxes on the 1m you receive. The other 10 painting are sitting in a storage unit. Then at some point in the future someone, one of you previous customers sells their painting in a private sale for 10M. They pay capital gains on $9.9m. Now you as the painter hypothetically have $100M worth of in paintings in your storage unit.…

This is how it works (or at least used to work) in The Netherlands.

If you receive Stock options, you pay taxes over the gains, i.e. the money you would have made if you exercised on that date. Even if you have not exercised. So the options were free, but suddenly you have to find a lot of money to keep them. Or you exercise a part of them.

Re: Elon Musk moves to Texas

#168

Post by chadlavi »

S_A_P wrote: post #158

Pretty interesting to see this move makes people so salty. There does seem to be a trend of people fleeing California, I dont know enough about the situation out there to comment on whether or not its valid. I suspect something must be going on for several high profile folks moving out. And before you bash Texas, its not perfect. But its pretty diverse, and it seems that folks with opposing viewpoints can still coexi…

It's a tax dodge.

Re: Elon Musk moves to Texas

#169

Post by bosswipe »

busterarm wrote: post #62
apcragg wrote: post #50

Earlier quoted context omitted.

Failing budget? I get that it's super popular right-wing talking point but it just hasn't been true for years. Prior to COVID (which has decimated state budgets Red and Blue) California had a huge surplus and massive rainy-day fund.

California has a $54B deficit this year. It's been all over the news, including very left-wing sources like NY Times and Politico. The state _projected_ a surplus and was off by an entire order of magnitude into the red. The state has been campaigning to Congress all year for about $14B in bailout money.

> very left-wing sources like NY Times and Politico.

Those are not very left-wing sources.

Edit: to the downvoters, this is objectively true. In actual leftist media NYT is considered conservative. The reality is that they are mostly mainstream.

Re: Elon Musk moves to Texas

#170

Post by LinuxBender »

tidepod12 wrote: post #118
SEJeff wrote: post #18

This article conveniently leaves the fact that he'll pay millions more in taxes in California due to TX not having any income tax until the very end. Also, his two biggest current projects (Giga Texas and Starship) are currently in Texas. This makes a lot of sense from a business standpoint and will just continue the flight from California. I suspect that once they have the Giga Texas built and delivering vehicles th…

Simply moving his official address from CA to TX does not mean he won't have to pay CA income taxes. CA still taxes income from work in CA even if you don't live there, and for part-time residents, CA still taxes all income even if the work happened in Texas. Musk surely has some good accountants to figure all this out, but it's not as clear cut as your first sentence makes it sound.

[Edit] Adding link to reciprocal agreements and filing in multiple states in thread below.

His businesses in California would have to move to Texas to realize the benefits.

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