Home Budget & Tax News List of Companies Leaving California Grows, Citing High Tax Burden, Cost of...

List of Companies Leaving California Grows, Citing High Tax Burden, Cost of Living

By Bethany Blankley

(The Center Square) – Leaders of corporations have been leaving California for years, relocating their headquarters, or their entire operations, out of state, citing the high cost of living and one of the highest tax burdens in the country as their reason, the California Policy Center notes in its updated California Book of Exoduses.

While large and small companies are relocating primarily to Texas, other destinations include Arizona, Tennessee, Florida, and a few other states.

The first to announce its exodus this year was Digital Realty Trust, a $36 billion company with over 1,500 employees. It announced last month it was relocating its global headquarters from San Francisco to Austin, Texas. The real estate investment trust will keep some of its presence in the Bay Area but is relocating the bulk of its operations to Texas. Its CEO, A. William Stein, said he’s doing so because of Texas’ “central location, affordable cost of living, highly educated workforce, and supportive business climate.”

Stitch Fix, a personal style service, began to disinvest in California and reinvest in lower-cost states last year. The $8.3 billion company formerly based in San Francisco laid off 1,400 stylists in California last June. By December, it began creating a new distribution center in Salt Lake City and this month announced it was shutting down its South San Francisco distribution warehouse altogether.

The California Policy Center has cataloged at least 50 large corporations that have left California since 2014, with the vast majority leaving in 2019 and 2020.

Of the six corporations that announced their California exodus so far this year, four relocated to Texas. First Foundation, a California bank, moved its holding company to Dallas; Digital Realty Trust moved its data center to Austin, following Oracle, Hewlett Packard Enterprise, and Tesla, which all announced their exodus last year.

Amazing Magnets, a magnet manufacturer, already broke ground for its new headquarters in Round Rock, a suburb of Austin. ZP Better Together, a company providing tech solutions for the deaf, also relocated its headquarters to Austin.

High-profile entrepreneurs also left the state last year. Billionaire Elon Musk, radio host Joe Rogan, and DropBox CEO Drew Houston all moved to Texas.

Notable California venture capitalists David Blumberg, Keith Rabois, and Shutterstock’s billionaire founder Jonathan Oringer left Silicon Valley for Miami, arguing San Francisco is poorly managed. Tech billionaire Larry Elison left California for Hawaii. Conservative talk show host Ben Shapiro left Lost Angeles for Nashville.

In addition to the Silicon Valley tech companies that already left California for Texas last year, Charles Schwab relocated its corporate headquarters from San Francisco to Dallas. Apple also announced the building of its new campus in Austin.

Survey company QuestionPro also relocated to Austin last year, as did SignEasy to Dallas, Finical, Inc. to Dallas, Dasan Zhone Solutions to Plano, and the $23 billion CBRE Group to Dallas.

California saw a cumulative decrease in adjusted gross income between 2010 and 2018 of $24.6 billion, according to a new analysis of IRS data by the independent research website Wirepoints.

It also reported a population loss for the first time in its recorded history according to Census Bureau data.

Increasing taxes, restrictive policies on businesses, and ongoing lockdowns have led individuals and Silicon Valley companies to exit California over the last two years, but in 2020, for the first time, California lost 70,000 residents on net.

Until 2020, California had gained population every year since 1900.

 

Originally published by The Center Square. Republished with permission. 

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