WASHINGTON, DC – Today, Congressman David Schweikert (AZ-06) introduced the Exit Tax Prevention Act of 2021, legislation that would prevent states from taxing Americans who relocate to a new permanent residence. This legislation comes in response to a proposal in the California State Legislature to use a wealth tax to continue to tax residents who leave California and move to another state.

“No American should be subjected to a tax penalty for their decision to move, whether that be a financial, family, lifestyle, or other choice,” said Rep. Schweikert. “The California State Legislature’s proposal sets a dangerous, unconstitutional precedent when it comes to taxing hard-working Americans trying to relocate to a state better suited for their goals and needs. I am proud to introduce the Exit Tax Prevention Act of 2021, which would ensure taxpayers are protected from this unconstitutional tax while allowing the freedom of human ingenuity and choice to continue to thrive across the United States.”

“California’s attempt to tax people AFTER they leave the state and become permanent residents in another state is a shameful and pathetic money grab.  The Taxpayers Protection Alliance supports The Exit Tax Prevention Act of 2021, a much-needed piece of legislation from Rep. David Schweikert (R-Az.).  The legislation will, “limit the authority of a State or other related taxing jurisdiction to impose a tax on a resident who has relocated permanent residence to another State or its related taxing jurisdiction,” preventing California (or any other state) from extending their tax borders. Taxpayers need to be protected from these money grabs and we are grateful that Rep. Schweikert is trying to stop this abuse,” said David Williams, President, Taxpayers Protection Alliance.

“American individuals and families should have the ability to move freely and easily between the states, and proposals to levy onerous taxes on residents leaving a particular state unduly interfere with that freedom of movement. The Exit Tax Prevention Act would prevent states from adding taxes that exclusively punish people seeking to move states, and NTU thanks Representative Schweikert for introducing this bill,” said Andrew Lautz, Director of Federal Policy, National Taxpayers Union.  



“Taxpayers are fleeing California because they are fed up with high taxes and big government. Rather than fixing this problem, lawmakers in the state are doubling down and considering the imposition of an ‘exit tax’ that would force departing residents to pay tax to California for a decade after they have left. This spiteful proposal is not only wrong, it is blatantly unconstitutional. Congressman Schweikert should be applauded for introducing the Exit Tax Prevention Act and standing against California’s plan to tax Americans fleeing big government policies,” said Grover Norquist, President, Americans for Tax Reform. 

“FreedomWorks applauds Congressman Schweikert for leading legislation to oppose California’s proposed wealth and exit tax. Liberal politicians continue to threaten our principles of less taxes and individual liberty, and the latest stunt in the California Assembly must be opposed at every level,” said Adam Brandon, President, FreedomWorks.

Background:

In 2020, Democratic members of the California State Legislature introduced a bill to place a wealth tax on certain California residents, including an “exit tax” on residents who move out of the state. Under the proposal, residents subject to the wealth tax who move out of California would be required to continue paying the exit tax for ten years at a sliding scale. 

The Exit Tax Prevention Act of 2021 would prevent states or taxing jurisdictions in the United States from imposing any form of tax on a resident who relocates their permanent residence to another state or taxing jurisdiction. This includes all 50 states, the District of Columbia, U.S. territories, municipalities, cities, counties, townships, parishes, transportation districts, or any other political subdivision of government with the authority to impose taxes on its residents in the United States. 



This legislation is cosponsored by Representatives Scott Franklin (FL-15), Jody Hice (GA-10), Tracey Mann (KS-01), and Scott Perry (PA-10).

This legislation is supported by Taxpayers Protection Alliance, National Taxpayers Union, Americans for Tax Reform, and FreedomWorks.

To read the full text of this legislation, click here. 

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