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 capital gains tax (since 2022; now 7 percent above a $278K deduction and 9.9 percent above $1M) and a state estate tax (above a $3M exemption, rates up to 35 percent through June 30, 2026, reverting to 20 percent thereafter). 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 $278K, 9.9% over $1M (since 2022) | Florida |
| State estate tax | None | Above $3M; up to 35% through Jun 2026, then 20% | 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 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 above an annual standard deduction ($278,000 for 2025, one combined amount per individual or married couple, indexed for inflation), rising to 9.9 percent on the portion of taxable gains above $1 million for the 2025 tax year onward. 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 gains in a single year, the Washington state tax is about 7 percent of $722,000 ($1M minus the $278K deduction) = roughly $50,500. The same gain in Florida is zero state tax.
Washington also has a state estate tax (RCW 83.100). For deaths on or after July 1, 2025 the exemption is $3 million per individual (raised from $2.193 million), with graduated rates reaching 35 percent on the largest estates for deaths through June 30, 2026; a 2026 law returns the top rate to 20 percent thereafter. Florida has no state estate tax. For a $10 million estate, the Washington state estate tax runs into seven figures; 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). A $1M annual gain triggers Washington's capital gains tax on about $722K above the $278K deduction = roughly $50,500 per year (more once gains exceed $1M, where the 9.9 percent surtax applies). Over 10 years that is around half a million dollars 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 run to several hundred thousand dollars (on the roughly $5M above the $3M exemption at progressive rates). Florida's estate tax is zero. Plus Washington's 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.