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Jeff Bezos to save nearly $1B in capital gains taxes by not living in Washington

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(The Center Square) – Amazon founder Jeff Bezos has filed a notice with the U.S. Securities and Exchange Commission to sell 25 million of the company’s shares currently worth about $5 billion.

In November, the word’s second richest man announced he was leaving Seattle after nearly 30 years of living in the area to move to Miami, Fla. That translates into the Evergreen State losing out on approximately $938 million this year from its former resident.

That’s because Washington has a 7% capital gains tax on the sale or exchange of long-term capital assets, such as stocks, bonds, and business interests. In 2021, the Legislature passed and Gov. Jay Inslee signed into law a capital gains income tax above $250,000 a year aimed at the state’s wealthiest residents. A lawsuit challenged the tax’s constitutionality, but in March 2023, the state Supreme Court held that it was constitutional.

Florida does not have a capital gains tax.

Amazon’s stock is currently at approximately $197.50 per share, meaning Bezos’ intent to sell 25 million shares will collect him $4.9 billion without having to pay Washington taxes.

In the final months of his residency in Washington, Bezos was subjected to owing the state $70 million for every $1 billion of Amazon stock he sold, but the billionaire didn’t make any major transactions like he did just before the capital gains tax took effect. Had he made the latest transaction under the capital gains tax, he would have had to pay $343 million out of the $4.9 billion he will collect from his impending sale of 25 million Amazon shares.

Since Bezos announced his move from the Evergreen State to Florida, he has filed to sell 75 million shares of Amazon stock. Bezos last adopted a trading plan in November to sell up to 50 million shares of Amazon stock totaling $8.5 billion in total.

Bezos has sold approximately $13.5 billion worth of Amazon shares so far in 2024.

The Center Square previously reported on the capital gains tax generating more than $889 million in revenue in its first year. That is 5.5% less than the $938 million in generated revenue the state missed out on from Bezos alone.

Rep. Jim Walsh, R-Aberdeen, who is also the state Republican Party chair, says the capital gains tax is bad and unpredictable. He pointed to the recent collapse in capital gain tax receipts from nearly $800 million in 2023 to a projected $400 million this year.

“I don’t blame Jeff Bezos or any other person for doing what’s right financially for themselves and their families. I wish he had stayed here, but the bad tax policies of the [Gov. Jay Inslee] administration chased him away,” Walsh emailed The Center Square. “A capital gain tax is always going to drive capital to friendlier places: Florida, the Cayman Islands, Switzerland.”

Washington voters will have the chance to end the capital gains tax this November. Initiative 2109, if passed, would repeal the tax.

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