I kid you not. They've been doing this for years, and now California has it's own brand of an 'Exit Tax', and I guarantee you Illinois, Massachusetts and New York aren't far behind, either. The New Jersey exit tax requires you to withhold either 8.97 percent of the profit/capital gain you make on the sale of your home or 2 percent of the total sale price: whichever is higher.
For the sixth consecutive year (2023), New Jersey had the most residents leave than any other state in the US, according to fresh data by an interstate moving company.
New Jersey’s outbound rate was roughly four percentage points higher than the No. 2 most moved-out of state last year, Illinois.
New York suffered the fourth highest exodus rate, roughly 60%, according to United Van Lines, which comes following a year of hefty losses on Wall Street, where dozens of firms have moved their headquarters in an effort to dodge rampant crime, stiff taxes and an increasingly exorbitant cost of living.
I sold my house in Jersey and rented for four years before I moved to Florida, or I would have been hit with a nearly $ 14,00.00 kick in the ass when I left.
What do all of those States have in common?
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ReplyDeleteNew Jersey defines people who sell a home during a year and leave the state (ie, establish residence elsewhere) as nonresidents. That seems reasonable, as such individuals are surely claiming resident status in the same year elsewhere. It wasn't clear whether one must live in NJ for more than the remainder of the year in order to avoid the non-resident tax status for the house sale. IF there is an actual requirement to live in the state for MORE THAN the remainder of the year (that is, maintain NJ residency beyond the end of the tax year) THEN one might argue this is a sort of exit tax, and probably unconstitutional as it burdens free movement. Otherwise it seems that it's just a matter of defining when residency applies, and residents get tax breaks that nonresidents do not.
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