Jeff Bezos’ Billionaire Tax Bill: More or Less Than You’d Expect?
Written by
Heather Altamirano
Edited by
Rebekah Evans
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In 2023, Jeff Bezos announced on Instagram he was moving Amazon’s headquarters from its birthplace in Seattle to Miami to be closer to his parents who moved back to Florida. The relocation of the wealthy entrepreneur was also partially sparked by his space exploration company Blue Origin whose “operations are increasingly shifting to Cape Canaveral,” he wrote.
While the farewell to Washington state was for personal and business reasons, it paid off financially. According to Fortune, Bezos saved $1 billion in taxes as a result of the move, which doesn’t surprise tax experts — here’s why.
A Strategic Move
You don’t become the world’s second richest man by accident. Bezos has cleverly strategized his way to the top and the estimated tax savings highlights how he amplified gains by cutting his tax bill.
“Jeff Bezos’ reported $1 billion tax savings may sound astronomical to many but it is more predictable than surprising when you understand the incentives built into our tax system,” said Angelo Crocco, certified public accountant (CPA), chartered global management accountant (CGMA) and owner of AC Accounting.
“Moving to Florida eliminates state income tax, meaning a high-net-worth individual like Bezos can avoid millions in annual tax liabilities,” He explained. “The move leverages a legal advantage many wealthy individuals have known for decades. It is a testament to geographic arbitrage’s power in tax planning.”
How Bezos Saved so Much in Taxes
Although Amazon was founded in Seattle out of Bezos’ garage he had no qualms ditching the city where he successfully ran the company for 30 years to reap the benefits of no state income or capital gains taxes in Florida.
“Washington recently introduced a 7% capital gains tax, while Florida offers a state income tax-free environment,” said Timothy Wingate Jr., accountant and member of Intuit’s Tax Customer Council. “When dealing with billions in long-term stock holdings, timing and location are crucial. The reported $1 billion in savings likely reflects a carefully calculated decision — especially for someone like Bezos, where every move is made with precision.”
What To Learn From Bezos’ Game Plan
Where you live makes a difference to your wallet. Bezos packed up and moved states to get a massive tax break and although a big change isn’t for everyone, understanding the tax laws is key.
“The lesson here revolves around proactive tax strategy rather than passively accepting tax burdens. It demonstrates that strategic relocation is not merely a tax avoidance trick but an exercise in aligning one’s life with the fiscal environment that best compliments one’s financial ambitions,” Crocco explained.
“The takeaway is not that everyone should uproot their lives in hopes of similar savings,” he added. “Instead, it underscores the importance of understanding tax implications in financial decision-making.”
Make Sure To Follow the Tax Rules
For high earners, relocating to a tax friendly state like Florida can significantly impact your money, however there are important actions to take according to Wingate Jr. who noted three vital things to do.
- Establish true residency — not just own property. This strategy works for anyone with significant income or assets, but you must meet all legal residency requirements.
- Consult a tax expert to ensure you’re following the correct steps. Moving to Florida for tax purposes is about more than just switching your address — it’s a careful, planned process.
- To benefit from Florida’s tax advantages, you need to establish it as your primary residence. That means meeting the state’s legal requirements, which can include living in the state for at least 183 days, filing a Declaration of Domicile and considering property taxes. You also need to make sure you’re documenting everything properly.
Bezos took rigorous measures to avoid a hefty tax bill that positioned him to save a monumentalamount while maintaining his lifestyle. This isn’t a one size fits all approach. “For high-net-worth individuals, the difference [in tax savings] can be enormous,” Wingate Jr. said.
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