Florida vs Washington: east coast no-tax meets west coast quasi-no-tax
Florida and Washington both market themselves as no-income-tax states. The headline is true on wages. But Washington has progressively added taxes the other 8 do not have: a 7 percent capital gains tax (since 2022) and a state estate tax (rates to 20 percent above $2.193M exemption). Florida has neither. For high-income earners and investors, the difference is structural. For salaried tech workers without big equity vests, the calculation is closer. Below is the full head-to-head.
Sources: FL DOR, WA DOR, Quinn v. Washington (2023), Tax Foundation 2024.
§ I · Side-by-Side
The numbers, head to head
| Category | Florida | Washington | Winner |
|---|---|---|---|
| State income tax (wages) | 0% | 0% | Tie |
| State capital gains tax | 0% | 7% above $250K (since 2022) | Florida |
| State estate tax | None | Up to 20% above $2.193M | Florida |
| Avg property tax | 0.86% | 0.94% | Florida |
| Combined sales tax avg | 7.02% | 9.20% | Florida |
| Homestead exemption | $50K + Save Our Homes 3% cap | Senior-only, income-limited | Florida |
| Corporate income tax | 5.5% on C-corps | 0% (B&O on gross receipts) | Depends |
| B&O / business tax | None | 0.138% to 1.5% on gross receipts | Florida |
| Cost of living index | 103 | 109 | Florida |
| Median home price | $410K | $580K | Florida |
| Climate | Subtropical, hurricanes | Maritime, mild, rainy | Depends |
| Hurricane / disaster risk | High coastal | Earthquake (long-tail) | Washington |
| Insurance burden | $4-12K coastal | $1.5-3K | Washington |
| Tech job market | Moderate (Miami growth) | Deep (Seattle, Microsoft, Amazon) | Washington |
§ II · The Capital Gains Surprise
Washington's 7 percent capital gains tax is the structural difference
Washington enacted SB 5096 in 2021, taking effect 1 January 2022. The Washington Supreme Court upheld the tax in Quinn v. Washington (March 2023) on a 7 to 2 ruling, characterising it as an excise on the privilege of selling capital assets rather than a constitutionally prohibited income tax. The mechanism matters because Washington's Constitution prohibits a graduated personal income tax, but the Court held that the capital gains tax is structurally an excise.
The tax is 7 percent on long-term capital gains exceeding $250,000 per year per individual or per joint return. Real estate gains are entirely excluded. Retirement account gains are entirely excluded. Stock gains, bond gains, mutual fund gains, ETF gains, and most non-real-estate investment gains are within scope. For a tech executive realising $1 million of stock vests in a single year, the Washington state tax is 7 percent of $750,000 ($1M minus $250K threshold) = $52,500. The same gain in Florida is zero state tax.
Washington also has a state estate tax (RCW 83.100) with an exemption of $2.193 million per individual in 2025 and rates up to 20 percent above $9.193 million. Florida has no state estate tax. For a $10 million estate, the Washington state estate tax is approximately $1.0 million; the Florida tax is zero. The combined effect of the capital gains tax (during life) plus state estate tax (at death) makes Washington materially worse than Florida for any high-net-worth household.
§ III · The Insurance Reversal
Insurance: Washington wins big on disaster exposure
Florida coastal homeowners insurance has tripled since 2018, averaging $4,000 to $8,000+ per year on a $400,000 home in coastal counties (Florida Office of Insurance Regulation 2024). Major insurers have withdrawn from the Florida market; Citizens Property Insurance Corporation now covers approximately 1.4 million Florida properties. Flood insurance through NFIP is separate, typically $700 to $2,500 per year. Total annual insurance burden on coastal Florida properties: $6,000 to $12,000+.
Washington homeowners insurance averages $1,500 to $2,800 per year on a $400,000 home. Earthquake insurance is optional and typically runs $500 to $1,800 per year through private insurers (Washington has no state-run earthquake insurer comparable to California's CEA). Total annual insurance burden in Washington: $2,000 to $4,500. The Washington insurance saving is real and meaningful, particularly for coastal Florida properties where the insurance burden can exceed property tax.
For inland Florida properties (Orlando, Lakeland, Ocala, Tallahassee), insurance is meaningfully cheaper than coastal Florida. A $400,000 home in Polk County typically costs $2,500 to $4,000 in homeowners insurance with no flood requirement, comparable to Washington. The hurricane insurance premium is fundamentally a coastal Florida premium, not a statewide one. For Florida buyers willing to be 30 miles inland, the insurance disadvantage versus Washington largely disappears.
§ IV · Three Personas
Three personas, three picks
Persona A: $250K base salary tech worker, no significant RSUs
Best fit: Washington (Seattle / Bellevue / Redmond). The deeper tech ecosystem, higher base salaries (Microsoft, Amazon, Google, Meta have major Seattle operations), and lower insurance burden make Seattle preferable for a salary-focused tech professional with limited equity exposure. The capital gains tax is irrelevant if you do not realise large gains. Florida (Miami) has rapid tech growth but cannot match Seattle's depth in 2026.
Persona B: $400K compensation tech executive, $1M+ annual RSU vests
Best fit: Florida (Miami / Tampa). The $1M+ annual RSU vest triggers Washington's 7 percent capital gains tax on $750K above the threshold = $52,500 per year. Over 10 years that is $525,000 of state tax that Florida does not charge. The Florida insurance disadvantage (coastal $4K to $8K per year) is small compared to the capital gains saving. Florida also wins on estate tax for HNW individuals. Choose inland Florida (Tampa, Orlando) to minimise insurance cost.
Persona C: HNW retiree, $5M brokerage, $8M estate
Best fit: Florida (Naples / Sarasota / Palm Beach). Washington's state estate tax on the $8M estate would be approximately $880,000 (above $2.193M exemption at progressive rates). Florida's estate tax is zero. Plus Washington's 7 percent capital gains tax on portfolio liquidation would cost $300K+ over a typical 10-year retirement. Florida wins by approximately $1.2M over a 15-year retirement period despite higher hurricane insurance. South Dakota dynasty trust can layer on top to preserve wealth across generations without state-level trust income tax.
§ V · Queries
Frequently asked
Q.01Is Florida or Washington better for taxes?
Q.02Does Washington really have an estate tax?
Q.03Is the cost of living lower in Florida or Washington?
Q.04Should a tech worker move to Florida or Washington?
Q.05Does Washington have a homestead exemption?
§ VI · Related
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Sources: Florida Department of Revenue, Washington Department of Revenue, RCW 82.87 (capital gains), RCW 83.100 (estate tax), RCW 84.36.381 (senior property tax exemption), Quinn v. Washington (2023), FL Constitution Article VII Section 5, Florida Office of Insurance Regulation 2024, BEA Regional Price Parity 2024, Tax Foundation 2024. Last reviewed May 2026. Information is for educational purposes only and is not tax, financial, or legal advice.