Hollywood’s High‑Stakes Breakup? Elite Stars Plot ‘California Exit Tax’ Escape Amid State’s Tax Clampdown!

Source: UNSPLASH

OK! Staff

Aug. 15 2025, Published 1:41 a.m. ET

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The whispers aren’t just at Chateau Marmont anymore; they’re in the trailers, on location vans, and over late‑night Zooms with money managers. A‑listers are quietly mapping “Plan B” addresses in Miami, Austin, Nashville, and Las Vegas, gaming out how to leave California without getting lassoed by what critics dub the ”California Exit Tax.” The stakes? Millions, maybe tens of millions, over a career and a residency audit that can turn a red‑carpet move into a legal migraine.

Wait, What Exactly is the “Exit Tax” Everyone’s Buzzing About?

Short answer: It isn’t a law. California does not currently have a wealth tax or an exit tax that follows you after you move. A prominent proposal, AB 259 (paired with ACA 3), would have created a wealth tax with long‑tail rules that could keep taxing former residents on a fraction of their wealth for up to four years after leaving, via a new category called “wealth‑tax resident.” That fractional formula phases down each year, essentially an “exit‑style” glide path, but the bill stalled and never became law.

Why the anxiety then? Because lawmakers revived the idea as recently as 2024, and advisors say versions can always come back. For now, though, there is no enacted California wealth tax.

California’s Real Clampdown: Residency “Paper Moves” Need Not Apply

Even without a wealth tax, California can still tax worldwide income if you’re a resident and the state’s residency rules are built for scrutiny. There’s no simple day‑count rule; auditors look at your closest ties (home, family, bank accounts, club memberships, driver’s license, doctors, voter registration, and more). Spend more than nine months in‑state and you’re presumed a resident. There’s a narrow 546‑day “safe harbor” for people who leave under an employment contract, but if your principal purpose is tax avoidance or you have high intangible income, it doesn’t apply. Translation: a Nevada mailbox won’t save a Malibu life.

The Math Pushing Stars to Pack

California’s top state income tax rate is 13.3% for the highest earners. On top of that, the state’s SDI payroll tax (used to fund disability and paid family leave) now hits all wages with no cap, 1.1% in 2024 and 1.2% in 2025, which is why some advisors talk about an “all‑in” bite on wage income.

By contrast, Florida, Texas, Tennessee, and Nevada tax no personal income, a simple pitch that lands with anyone staring at eight figures of back‑end points. (Florida and Texas are among nine no‑income‑tax states; Nevada’s tax agency spells it out plainly.)

So Who’s Moving and Who’s Making it Work?

Mark Wahlberg openly moved his family from L.A. to Las Vegas, talking up the quality of life and even floating “Hollywood 2.0” dreams in Nevada. People.com
Sylvester Stallone announced on his Paramount+ docuseries that he and his wife were leaving California “permanently” for Florida. CBS News

How Top Talent is “Plotting the Escape” (Legally)

Agents might float the headline, but the real work happens with CPAs and residency counsel. Here’s the quiet checklist making the rounds:

Move the center of life on paper and in reality. Buy or lease your new primary home, move your spouse/kids, switch schools, update estate docs, and move household staff if applicable. Ties matter more than days.
Change the wallet and the wheels. New‑state driver’s license and voter registration; register vehicles; move bank, brokerage, and physician relationships; join clubs where you actually live.
Be careful with California days. More than nine months triggers a presumption you’re still a resident; if you’re back for a run‑of‑show, log everything.
Don’t misread the “546‑day” safe harbor. It’s limited to bona fide employment contracts outside California and has exceptions (e.g., high intangible income). It’s not a blanket “18‑month rule.”
Re‑paper your business world. If you own loan‑out companies, production entities, or brand IP, talk to counsel about where they’re managed and controlled and the sourcing of income from California shoots or endorsements. (California can still tax California‑source income earned by nonresidents.)
Plan for proposals. Even though AB 259/ACA 3 didn’t pass, future wealth‑tax ideas could include post‑move exposure. Advisors are modeling “what‑if” scenarios so clients aren’t caught flat‑footed.

Why Does This Get Messy Fast

A star who “moves” to no‑tax Nevada but keeps a Brentwood compound, spends most days in LA for a prestige series, keeps California doctors, and has kids in Santa Monica schools? On those facts, California could still call them a resident and tax everything. The state’s own guide is clear: it’s a facts‑and‑ties test, not a hashtag.

Big Picture: It’s Money and Momentum

California remains the creative mothership and is now juicing incentives to keep crews working. But tax and cost dynamics are real: top‑bracket earners face 13.3% state income tax, plus uncapped SDI on wages, while rivals like Texas, Florida, Tennessee, and Nevada pitch zero. That delta is driving both relocations and leverage stars can now ask studios to follow them where their accountants say “action.”

Bottom Line for Bold‑Face Names

If you’re going to “break up” with California, do it like you mean it: shift your life, not just your luggage. The rumored “exit tax” remains a proposal, not a law but residency rules and payroll levies are very real, very current, and very audit‑ready. In Hollywood terms: perform the role of a true nonresident, or expect a brutal rewrite in the third act.

This article is informational and not legal or tax advice. Talk to a qualified tax professional before making residency or filing decisions.