- Jeff Bezos announced he is moving from Seattle to Miami, in part to be close to his parents.
- Bezos and fiancé Lauren Sanchez have reportedly purchased two properties in Indian Creek, Florida.
- Moving from Washington state to Florida could save Bezos a yachtload in taxes.
Jeff Bezos announced on his Instagram Thursday that he will be leaving Seattle after 29 years to move to sunny Miami.
The Amazon founder posted video footage recorded by his father, Miguel Bezos, showing Jeff in his first office alongside a caption that said: “My parents have always been my biggest supporters. They recently moved back to Miami, the place we lived when I was younger (Miami Palmetto High class of ’82 — GO Panthers!) I want to be close to my parents, and Lauren and I love Miami.”
Bezos has already purchased two homes in ritzy Indian Creek, Florida, adding to his extensive real estate portfolio. Indian Creek is a small private island in Miami’s Biscayne Bay known as “Billionaire Bunker.”
It’s really sweet how he’s moving to be closer to his parents in their golden years — and I’m being serious when I say that. Many members of this “sandwich generation” find themselves still caring for children (Bezos has four with ex-wife McKenzie Scott) along with their aging parents. Giving up his familiar world of Seattle to be with them must have been hard on Jeff.
It’s definitely because he’s the most loving, devoted son (shouldn’t you call your mother?), and definitely has nothing to do with the fact that moving to Florida from the state of Washington could save him a few yachts worth in taxes, right?
Oh, right. Taxes.
Why are most of the homes in Amsterdam really thin and tall? Hundreds of years ago owners had to pay taxes based on the square footage of the front of their building. If a whole city was constructed in a way to avoid tax, then it’s easy to understand why careers and corporations are fashioned for these reasons, too.
This is part of the reason why in the mid-90s Jeff Bezos once drove from New York City, where he had a fancy hedge fund job, all the way to Seattle to start an internet book retailer.
In Brad Stone’s book, The Everything Store, this is explained:
Bezos chose to start his company in Seattle because of the city’s reputation as a technology hub and because the state of Washington had a relatively small population (compared to California, New York, and Texas), which meant that Amazon would have to collect state sales tax from only a minor percentage of customers.
As Amazon grew and built loads of warehouses in other states, the company went through ridiculous contortions to avoid establishing a sales tax “nexus” in those other states, because that would have meant customers would have had to pay an extra 7% or more on all their purchases, crushing Amazon’s sales growth.
Now, Bezos is selling hundreds of millions of dollars in Amazon stock every year, and he’s on the move again. Washington state recently introduced a 7% capital gains tax. It was deemed constitutional only a few months ago. Now, he’s off to Miami which has no capital gains tax, and is known for being a haven for the tax-avoidant.
Let’s do some simple math.
Bezos has sold about 2.1 million Amazon shares this year, according to SEC filings. Amazon stock has traded between $85 and $138 per share this year, so let’s say just for illustrative purposes that he sold at an average price of $100.
That’s $210 million, some of which is likely capital gains. Washington state now levies a 7% capital gains tax. There are some exemptions, but only for the first first few hundred thousand in gains each year. So that would theoretically mean that Bezos could have owed millions in capital gains tax on his Amazon stock sales this year.
According to those SEC filings, Bezos still owns 990 million Amazon shares. At today’s stock price, that’s worth about $137 billion. Put a 7% tax on that, and the bill could be in the billions of dollars.
Tech billionaires often have most of their wealth tied up in stock. They don’t worry too much about income tax, but they do focus a lot on capital gains tax. Bezos has a lot of Amazon stock but also has made a number of other investments over the years. Those holdings will probably be exposed to capital gains tax, too.
Would you move to Miami to save that much? I would. Your mother would call it just good sense. Oh, and call your mother.
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