California Exit Tax Proposals and Your Gold IRA

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Last updated: July 3, 2026 · By Gold California Editorial

The "California exit tax" is a phrase you find in retirement forums, YouTube warnings, and headline articles. It suggests that California will chase you for taxes even after you leave. For a saver with a gold IRA, the fear is specific: will the state grab a piece of your account after a move to Nevada or Texas?

The short answer, as of July 2026, is no. There is no California exit tax on the books. The two bills that sparked the phrase both died in Assembly committee without a floor vote. Below we explain what the proposals actually said, what current law does, and what a saver planning a move should watch for.

What people mean by "California exit tax"

The phrase is a shorthand for two things. Neither is a state exit tax in the sense of a departure levy triggered by leaving.

The first thing is a set of California wealth tax proposals that included a former-resident tail. If enacted, those bills would have kept taxing a person's worldwide net worth for years after the move, but only for individuals above 30 million or 50 million dollars in net worth. We cover the exact text of AB 2088 and AB 259 below.

The second thing is a garbled version of the federal expatriation tax at IRC 877A. That tax applies when a person renounces U.S. citizenship or ends long-term green-card residency. It has nothing to do with a California-to-Nevada move.

Neither of these is what most retirees imagine when they hear "exit tax". Neither creates a tax on a gold IRA distribution triggered by leaving California.

The current law: no California exit tax exists

California statute has no exit tax. There is no departure tax. There is no wealth tax. There is no clawback provision that follows a former resident's IRA distribution across state lines. This has been true through every legislative session and remains true as of July 2026.

What California does have is a residency-based income tax. While you are a resident, California taxes all your income from any source, including gold IRA distributions. Once you are a nonresident, California cannot tax your retirement income. That rule was set by federal law in 1996 and has not changed since.

The FTB itself confirms the rule in Publication 1100, "Taxation of Nonresidents and Individuals Who Change Residency". The publication states directly: "California does not tax the IRA distributions, qualified pension, profit sharing, and stock bonus plans of a nonresident" (source: FTB Publication 1100, REV 10-2024).

Worth knowing: tax follows residency on the day the distribution is paid, not on the day the account was funded. If you were a California resident when you funded the IRA, then move to another state and take the distribution, California cannot tax it.

The federal shield on a gold IRA once you leave

The rule that protects a nonresident's retirement income from state taxation sits in federal law. It is 4 U.S. Code Section 114, enacted as Public Law 104-95 in 1996 and amended in 2006.

The statute reads: "No State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State" (source: 4 U.S. Code Section 114). The federal definition of "retirement income" lists IRAs by name. A self-directed gold IRA falls inside that definition.

The list also covers pensions under IRC Section 401(a), 403(a) and 403(b) annuities, SEP IRAs under Section 408(k), governmental 457 plans, and military retired pay under chapter 71 of title 10. Congress wrote the rule to stop states from chasing former residents across state lines on retirement income tied to work performed in-state.

Once you are not a California resident or domiciliary, the state cannot tax your gold IRA distribution. The protection comes from federal law, not from a state election.

AB 2088 (2020): the Bonta wealth tax proposal

AB 2088 is the bill most often called the "California exit tax". It was introduced in 2020 by Assemblymember Rob Bonta (later California Attorney General) with a group of coauthors. The bill was a wealth tax, not an income tax or a departure tax.

The rate and threshold

The Legislative Counsel digest reads as follows. "This bill would impose an annual tax at a rate of 0.4% of a resident of this state's worldwide net worth in excess of $30,000,000, or in excess of $15,000,000 in the case of a married taxpayer filing separately." Source: AB 2088 bill text.

Two numbers matter. The rate was 0.4 percent per year. The threshold was 30 million dollars of worldwide net worth (15 million dollars for a married taxpayer filing separately). The tax applied only to the portion of net worth above that threshold.

The 10-year former-resident tail

This is the piece that created the "exit tax" label. Under proposed Section 50310(b)(3)(A), a former California resident who had been subject to the wealth tax in one of the preceding 10 years would keep paying a shrinking share of the tax for up to 10 years after leaving.

The mechanic was mechanical. The share was a fraction with the numerator equal to years of California residence over the prior 10 years and the denominator equal to 10. For each year outside California, the numerator dropped by 1 until it reached zero. That is the tail people call an "exit tax".

The tail only applied to taxpayers who had been subject to the wealth tax while they lived in California. To be subject to the wealth tax, a person needed worldwide net worth above 30 million dollars in the first place. A gold IRA saver with a normal retirement balance never entered the base.

Where AB 2088 ended up

The bill did not become law. The California legislature's official status page lists AB 2088 as "Inactive Bill - Died" in the Assembly Rules Committee, with a final action of "From committee without further action" on November 30, 2020 (source: AB 2088 status).

The bill never received a floor vote. It never passed the Assembly. It never went to the Senate. It never reached the governor. It is not law.

AB 259 and ACA 3 (2023): the Lee wealth tax package

The 2023 attempt was a two-bill package by Assemblymember Alex Lee. AB 259 was the wealth tax bill. ACA 3 was the constitutional amendment that AB 259 needed to become operative. Both died in Assembly Revenue and Taxation.

AB 259 rate structure

AB 259 had a two-phase rate. Phase one covered tax years 2024 and 2025. The Legislative Counsel digest phrased it this way. "Impose an annual tax at a rate of 1.5% of a resident of this state's worldwide net worth in excess of $1,000,000,000, or in excess of $500,000,000 in the case of a married taxpayer filing separately." Source: AB 259 bill text.

The second phase, starting January 1, 2026, would have added a lower-threshold tier. The digest continues: "impose an annual tax at a rate of 1% of a resident's worldwide net worth in excess of $50,000,000, or in excess of $25,000,000 in the case of a married taxpayer filing separately".

A 0.5 percent additional layer would have stacked on billion-dollar wealth from 2026 onward. All rates and thresholds sit far above a typical retirement balance.

The constitutional-amendment contingency

AB 259 could not have taken effect on its own. The bill contained a self-limiting clause: "the tax imposed by the bill shall only become operative if a specified constitutional amendment is approved by the voters and takes effect". That constitutional amendment was ACA 3.

ACA 3 was introduced the same day by the same author. Its purpose was to authorize the wealth tax outside California's Gann appropriation limit. Without ACA 3 going to voters and passing, AB 259 could not activate.

Where the 2023 package ended up

Both bills died. The legislature's status pages show AB 259 as "Inactive Bill - Died" in the Assembly Revenue and Taxation Committee (source: AB 259 status). ACA 3 died in the same committee (source: ACA 3 status).

Because ACA 3 never went to voters, AB 259 could not have taken effect even if it had passed. The 2023 package produced no operative statute.

Why the proposals never touched typical gold IRA savers

The dollar thresholds in both bills are the fact most retirement savers miss. The wealth tax base was worldwide net worth, and the thresholds started at 30 million dollars (AB 2088) or 50 million dollars (AB 259 second phase).

A typical gold IRA holds between 50,000 and 500,000 dollars. Even a 1 million dollar retirement account with a home paid off and other investments sits an order of magnitude below the lowest proposed threshold.

Source: California Legislature bill status and text pages for AB 2088, AB 259, and ACA 3. Checked July 2026.

The base of both wealth tax proposals excluded real property held directly by the taxpayer. AB 2088 stated: "Worldwide net worth shall not include any real property directly held by the taxpayer." Retirement accounts were part of the wealth base for computing the tax on the tiny group of taxpayers who cleared the threshold. They were not a separate rate on IRAs.

The federal expatriation tax at IRC 877A is a different animal

Some readers ask about the California exit tax and get an answer describing the federal expatriation tax. The two are not related. The federal tax sits at Internal Revenue Code Section 877A, "Tax responsibilities of expatriation" (source: IRC 877A).

IRC 877A applies to a person who expatriates. That means renouncing U.S. citizenship or terminating long-term permanent residency (giving up a green card after holding it for a defined period). Moving from California to Nevada, Texas, or Florida does not qualify. IRC 877A does not fire on interstate moves.

Even for a person who does expatriate, the tax only applies to a "covered expatriate". That label attaches when the person has net worth of 2 million dollars or more, an average annual net income tax over 5 years above an inflation-adjusted threshold, or a failure to certify 5 years of tax compliance. The regime marks the covered expatriate's property to market the day before expatriation and taxes the deemed gain.

For a covered expatriate with an IRA, IRC 877A(d) treats the entire IRA as distributed the day before expatriation, and the distribution is taxable. That is a hard tax, but again: it applies to a person giving up U.S. citizenship, not to a California resident moving to another state.

What California can still tax: the residency test, not an exit tax

Here is the piece that gets lost in the exit tax discussion. California does not need an exit tax to keep taxing a person who claims to have moved out but has not really moved out. The FTB uses the ordinary residency test to reach that person's income, including gold IRA distributions.

The test lives in FTB Publication 1031, "Guidelines for Determining Resident Status" (source: FTB Publication 1031). It has two parts.

The nine-month presumption

Publication 1031 states: "You will be presumed to be a California resident for any taxable year in which you spend more than nine months in this state." The presumption is rebuttable, but the burden is on you.

The closest-connections test

Outside the nine-month presumption, California asks where your "closest connections" sit. Factors include time in California versus outside, location of your spouse and children, principal residence, driver's license, vehicle registration, voter registration, banking, medical providers, professional advisors, social ties, and real property. No single factor decides the case. The strength of the ties, not the count, determines residency.

For the full playbook on breaking residency cleanly, see the leaving-California with a gold IRA spoke.

The audit track record

The FTB has a long history of residency audits. The largest cases involve high-income earners with mobile income, but retirees with significant IRA balances also draw attention, especially when a large distribution follows shortly after a claimed move. Auditors review cell phone records, credit card locations, utility bills, and California-based medical or professional visits.

This is not an exit tax. It is normal residency-based taxation applied through audit. Break your ties cleanly, document the change across the FTB factors, and the closest-connections test moves in your favor.

Worked example: a Los Angeles saver with a 250,000 dollar gold IRA

How to leave California without a state tax gap on your gold IRA

Below is the sequence most savers follow when they want the state tax piece on a gold IRA distribution removed cleanly. This is not about avoiding a nonexistent exit tax. It is about proving residency change before the distribution is paid.

1. Set a physical move date. Pick a real date you will depart California. That date anchors the part-year residency split on your Form 540NR.
2. Sell, rent out, or vacate your California home. A furnished California home available for your own use is one of the strongest factors against you in a residency audit.
3. Establish a principal residence in the new state. Sign a lease or buy in the new state. A hotel or a relative's spare room is not a principal residence.
4. Update your driver's license, vehicle registration, and voter registration. Do this within 30 days of the move. These are time-stamped records the FTB can pull.
5. Change your IRA custodian's address on file. The custodian's address determines what appears on your 1099-R. A California address there draws FTB attention.
6. Move your medical, dental, and professional providers. New-state insurance plans and primary-care assignments are time-stamped records too.
7. Wait through a clean tax year before taking a nonresident distribution. A January distribution in the year after the move is much easier to defend than a December distribution in the year of the move.
8. File Form 540NR with Schedule CA (540NR) for the year of the move. Report California income through your last day of residency and nothing from the nonresident portion of the year.

If a future exit tax bill actually passes

Neither AB 2088 nor AB 259 passed. Similar bills may be reintroduced in future California sessions. If one is enacted, the analysis for a typical gold IRA saver would follow the same three questions.

First, what is the base? Every serious proposal so far taxed worldwide net worth, not IRA distributions. A retirement account is one asset among many in the base, not a separate rate.

Second, what is the threshold? Every proposal so far started at tens of millions of dollars. A gold IRA saver with a normal balance is not in the base.

Third, does federal law still preempt state taxation of nonresident retirement income? Yes, 4 U.S. Code Section 114 remains binding federal law. A state cannot use a wealth tax as a workaround to tax the ordinary retirement income of a nonresident, because the federal statute preempts that direct application.

If the base or the threshold changed in a future bill, this analysis would need to be revisited. As of July 2026, no such bill is on the books.

When the "exit tax" narrative is a bad reason to act

Reacting to an exit tax that does not exist can push a saver into decisions that cost more than they save. Below are the cases where the narrative is doing more harm than good.

• You are rushing a Roth conversion "before the exit tax hits". There is no exit tax to hit. Rushing a Roth conversion inside a high California tax bracket can lock in more state tax than a patient conversion after a real move to a no-tax state.
• You are pulling money out of a gold IRA early to "beat" a bill that never became law. An early distribution triggers the federal 10 percent additional tax under IRC Section 72(t) and the California 2.5 percent additional tax on FTB Form 3805P if you are under age 59 and a half. Those are real costs. The exit tax you are trying to avoid is not.
• You are moving out of state solely on the exit tax rumor. The state savings on a modest IRA balance rarely justify the disruption. If a move is right for other reasons (family, cost of living, weather, health), the state tax piece is a bonus. It is not the case on its own.
• You are selling physical gold outside the IRA at a bad price to "get out first". Nobody can predict where gold prices will go. Locking in a sale price to avoid a nonexistent tax converts an unknown risk into a certain cost.
• You are changing custodians in a hurry. A rushed rollover that misses the 60-day rule under IRC 408(d)(3) becomes a taxable distribution and, under age 59 and a half, a penalty stack. There is no clock running on the "exit tax" side. There is a real clock on rollover mechanics.
• You are opening a gold IRA solely because it will "escape" the exit tax. A gold IRA is a retirement account with the same tax treatment as any other traditional or Roth IRA. It does not have a special immunity to any state tax. Choose it or not on the merits.

California exit tax questions, answered

Is there a California exit tax on gold IRAs in 2026?

No. As of July 2026, California statute has no exit tax, no departure tax, and no wealth tax. AB 2088 (2020) and AB 259 (2023) were wealth tax proposals that died in Assembly committee without a floor vote. Federal law at 4 U.S. Code Section 114 continues to bar any state from taxing the retirement income of a nonresident.

What did AB 2088 actually propose?

AB 2088 proposed a 0.4 percent annual tax on a California resident's worldwide net worth above 30 million dollars (15 million dollars for a married taxpayer filing separately). It included a 10-year former-resident tail for taxpayers who had been subject to the tax while living in California. The bill died in the Assembly Rules Committee in 2020.

What did AB 259 and ACA 3 propose?

AB 259 was a two-phase wealth tax proposal by Assemblymember Alex Lee. Phase one applied 1.5 percent on worldwide net worth above 1 billion dollars for 2024 through 2025. Phase two applied 1 percent above 50 million dollars from 2026 onward, with a 0.5 percent extra layer on billion-dollar wealth. The bill required ACA 3, a constitutional amendment, to become operative. Both died in the Assembly Revenue and Taxation Committee in 2023.

Would the wealth tax have applied to my gold IRA?

Only if your total worldwide net worth cleared the threshold: 30 million dollars for AB 2088 or 50 million dollars for the AB 259 second phase. A gold IRA holding 50,000 to 500,000 dollars, even added to home equity and other savings, is well below either threshold for a typical saver.

Is the federal expatriation tax under IRC 877A the "California exit tax"?

No. IRC 877A is a federal tax triggered by giving up U.S. citizenship or ending long-term green-card residency, not by moving between states. A California-to-Nevada move does not trigger IRC 877A. The federal statute lives at 26 U.S. Code Section 877A.

Can California tax my gold IRA distribution after I move to another state?

Not if your residency change is genuine. Under 4 U.S. Code Section 114 and FTB Publication 1100, California does not tax the IRA distributions of a nonresident. What can still cost you is a failed residency change under the FTB closest-connections test in Publication 1031. Break the ties cleanly and California cannot reach the distribution.

Do I have to pay a fee to California when I move out?

No. California does not charge a departure fee, an exit tax, or any levy tied to leaving the state as an individual retiree. Your remaining obligation is to file a Form 540NR for the year of the move, reporting California income through your last day of residency and nothing after.

Could a future California legislature enact an actual exit tax on retirement accounts?

A California legislature can introduce any bill, but a direct state tax on the retirement income of a nonresident is preempted by 4 U.S. Code Section 114, a federal statute. A future bill would face that federal preemption in court on the specific point of taxing nonresident IRA distributions. This is a legal observation, not a prediction. Consult a licensed tax advisor if a specific future bill affects your planning.