When considering a big move across the country, one of the most important factors to think about is how your finances will change. Both California and New York are known for relatively high taxes, but the way each state structures and applies them can make a significant difference in your budget. If you’re moving from CA to NY, understanding these tax differences upfront can help you plan smarter.
Income Taxes: Progressive but Different Rates
Both California and New York use a progressive income tax system, meaning your tax rate increases as your income rises. California has some of the highest personal income tax rates in the country, with a top marginal rate of 13.3% for the wealthiest earners. Even middle-income Californians may feel the pinch, as the rates climb quickly through multiple brackets. New York also imposes progressive income taxes, with a top rate of 10.9%. While slightly lower than California’s maximum, residents of New York City face additional local income taxes, which can range from 3% to 4%, making their overall burden higher than most Californians. If you’re weighing the pros and cons of moving from California to New York, factoring in local city taxes is essential, especially if you’re relocating to New York City.
Sales Taxes: State vs. Local Add-Ons
Sales taxes are another area where differences can add up. In California, the statewide base sales tax is 7.25%, the highest minimum in the country. Local jurisdictions can tack on extra percentages, pushing total sales tax rates to over 10% in some areas. New York’s statewide sales tax is 4%, but counties and cities add their own taxes, with combined rates reaching 8.875% in New York City. This means everyday purchases—groceries, clothes, dining—can feel more expensive depending on where you shop. These variations mean your cost of living might not drop as much as expected after a cross-country relocation.
Property Taxes: A Different Landscape
Property taxes are often overlooked in tax comparisons but play a huge role in housing affordability. California benefits from Proposition 13, which keeps property taxes relatively low by capping increases at 2% per year unless the property is sold. The average effective property tax rate sits around 0.75%, well below the national average. New York, by contrast, has an average property tax rate of about 1.7%. Rates vary widely by county, with suburban areas like Westchester and Nassau often topping the charts. For homeowners considering moving from CA to NY, this difference could significantly impact your long-term housing costs.
Other Considerations: Estate and Corporate Taxes
Estate taxes are another area worth paying attention to. New York imposes an estate tax on estates exceeding a certain threshold, while California does not currently levy one. Businesses will also find differences, with New York maintaining both corporate franchise and business income taxes, compared to California’s single corporate income tax system.
The Bottom Line
While both states are considered high-tax environments, the structure and emphasis of those taxes differ. Californians enjoy lower property taxes but face higher income tax rates, while New Yorkers deal with moderate state income taxes combined with steep property and local levies. If you’re in the process of moving from CA to NY, planning for these changes can help you avoid financial surprises. Consulting with a tax professional and budgeting for the shift ahead of time will make the transition smoother and more predictable.