The wealth tax is here: how to move your California LLC or corporation to a new state [step-by-step]

Attorney and CPA Chad D. Cummings reviews Proposition 40, the California Billionaire Tax Act on the November 3, 2026 ballot. The measure imposes a one-time five percent tax on the net worth of billionaires who resided in California as of January 1, 2026, measured as of December 31, 2026. A Tax Foundation analysis by Jared Walczak concludes the measure is vulnerable to constitutional challenge on so many independent grounds that courts may strike it down entirely. The residency date precedes the election by more than ten months, so a person who left on January 2 still owes tax on worldwide wealth at year-end, including assets accumulated elsewhere. The measure claims apportionment without any reduction based on residency history. A nonresident spouse’s out-of-state wealth can be attributed to the California spouse, trusts funded by a California billionaire are captured even when all parties and assets sit elsewhere, and divorce debts are added back. Appraisers face uncapped penalties of up to four percent of any understatement. If courts invalidate the tax, California still faces the departure of founders, the deterrence of future ones, years of litigation, and zero collections. Florida and Texas have no personal income tax and no wealth tax. Neither attempts to tax people who already left or to reach spouses and assets outside their borders. Learn more about moving your California LLC or corporation to another state: https://www.cummings.law/redomestication/move-business-out-of-california