Taxes
California vs. Nevada taxes: the side-by-side.
The single biggest reason our clients move. Every major tax, compared honestly — including the ones where California is fine and the ones where Nevada isn't free.
By Ron Glogovsky, Nevada REALTOR® S.0204927
Last updated
California funds itself with the highest personal income tax in the country. Nevada funds itself with gaming, sales tax and a modest property tax, and has no personal or corporate income tax at all. For a working household or a retiree with investment income, that difference dwarfs everything else in the relocation math.
The comparison
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| Tax | California | Nevada |
|---|---|---|
| State income tax (top rate) | 13.3% | 0% |
| Tax on capital gains | Taxed as ordinary income, up to 13.3% | None |
| Tax on retirement income, pensions & Social Security | Taxed (Social Security exempt) | None |
| Corporate income tax | 8.84% | None (Commerce Tax only above $4M gross revenue) |
| Minimum franchise tax (LLC / corp) | $800 per year | None ($350 annual list + license fee for most LLCs) |
| Sales tax (major metro) | 9.5% Los Angeles · 7.75% Orange County | 8.375% Clark County |
| Effective property tax | ≈1.1–1.25% of purchase price | ≈0.5–0.6% of assessed value; owner-occupied increases capped at 3%/yr |
| Estate / inheritance tax | None | None |
| Gasoline (state excise + fees) | Highest in the U.S. | Roughly national average |
Income tax: 13.3% vs. 0%
California's 2025 rate schedule runs from 1% to 12.3% across nine brackets, and taxable income above $1 million pays an additional 1% Mental Health Services Tax. Capital gains get no preferential rate: the sale of a business, a rental property, appreciated stock or company RSUs is taxed as ordinary income. Retirees pay California tax on pensions, IRA and 401(k) withdrawals and annuities (Social Security is exempt). On top of the income tax, California collects State Disability Insurance on every dollar of wages — the cap was removed in 2024 — at roughly 1.2%.
Nevada has no personal income tax. That does not erase California tax on California-source income after a move. For example, a nonresident may still owe California tax on gain from selling California real estate; review the timing and sourcing of any sale with your CPA.
Run your own numbers
Illustrative annual income tax using the 2025 California rate schedule and standard deduction, including the 1% surcharge above $1M. Excludes one-time gains, SDI payroll tax, credits and federal tax. California-source gains, including a California home sale, may remain taxable after a move. Confirm your residency and tax treatment with a CPA.
Your estimated California state income tax
$15,273
per year · $1,273 a month · 6.1% effective
Nevada state income tax
$0
Monthly equivalent
$1,273
Your actual difference depends on residency, income sources and future tax rules. Ron can help plan the move; review the tax timing with your CPA.
Property tax: Nevada is lower, and it's capped
California's Prop 13 sets the base rate at 1% of purchase price and limits assessment growth to 2% a year, but local bonds and assessments push the real bill to 1.1–1.25% in most counties. Nevada assesses at 35% of taxable value and applies a district rate that lands most Clark County homeowners at 0.5–0.6% of market value, and annual increases on a primary residence are capped at 3%. The one thing to know: if you have owned your California home for decades, your Prop 13 basis is very low, and that advantage does not travel. Prop 19 only lets you carry it to another California home.
Sales tax: roughly a wash
Clark County (Las Vegas, Henderson) charges 8.375%. That is lower than Los Angeles County (9.5%) and higher than Orange and San Diego counties (7.75%). Groceries and prescription drugs are exempt in both states.
Business taxes: Nevada is built for owners
California charges an 8.84% corporate income tax, an $800 minimum franchise tax on every LLC and corporation, and taxes pass-through income at personal rates up to 13.3%. Nevada has no corporate income tax and no personal income tax; its Commerce Tax applies only to businesses with more than $4 million in Nevada gross revenue, and most LLCs pay a few hundred dollars a year in annual list and business license fees. Nevada's asset-protection and business-court statutes are a large part of why so many California owners re-domicile here.
Estate and inheritance tax: neither state has one
This is a common misconception. Neither California nor Nevada imposes an estate or inheritance tax; only the federal estate tax applies. Nevada does, however, allow long-duration asset-protection trusts that California does not recognise, which is a conversation for your estate attorney.
The catch: you have to actually move
California residency depends on your circumstances, including where you live, work and maintain important ties. Use the moving checklist to document your move. California-source income, including rent or gain from California real estate, can remain taxable after you leave.
Tax questions we hear every week
Is Nevada really a no-income-tax state?
Yes. Nevada has never levied a personal income tax and its constitution prohibits one without a vote of the people. Wages, self-employment income, capital gains, interest, dividends, pensions, IRA and 401(k) distributions and Social Security are all untaxed at the state level.
What is California's top income tax rate?
12.3% on taxable income above roughly $721,000 (single) or $1.44 million (married filing jointly), plus a 1% Mental Health Services Tax on taxable income above $1 million, for a combined 13.3%. California also collects an uncapped State Disability Insurance payroll tax of about 1.2% on all wages.
Does Nevada have higher property taxes to make up for it?
No. Nevada's effective property tax runs roughly 0.5–0.6% of assessed value and annual increases on an owner-occupied home are capped at 3%. California's Prop 13 caps the rate at 1% of purchase price plus local bonds, typically 1.1–1.25% in total. A $700,000 home costs about $8,000 a year in California and about $3,500–$4,200 in Henderson.
Is sales tax higher in Nevada?
Slightly, in some comparisons. Clark County's combined rate is 8.375%. Los Angeles County is 9.5%, Orange County 7.75%, San Diego 7.75% and San Francisco 8.625%. Groceries and prescriptions are exempt in both states.
Can California tax me after I leave?
Yes. California-source income can remain taxable to a nonresident, including gain from selling California real estate, California rental income and pay for work physically performed there. Residency is fact-specific, so document the move and review major transactions with a California tax adviser.
Want the tax picture for your specific situation?
Ron will connect you with a Nevada CPA who does California exits every week, and map the move so the savings are real.