In a surprising move last week, Jeff Bezos, the world’s richest person, managed to avoid paying state taxes on his $2 billion stock sale. While Bezos had announced his relocation to Miami in 2021, the recent sale and its tax implications shed light on the strategic nature of his decision. Although he cited being closer to family and his space company, Blue Origin, as the primary reasons for the move, experts speculate that taxes played a significant role as well.
Bezos, who had resided in Seattle for nearly three decades, faced a new capital gains tax in Washington state initiated in 2022. This tax, amounting to 7% on stock or bond sales exceeding $250,000, marked the first time Bezos would face state taxes on his stock sales. Prior to the tax’s implementation, Bezos regularly sold billions of dollars’ worth of Amazon shares, primarily to fund his philanthropic endeavors, Blue Origin, and his personal expenses, such as his luxurious mega yacht and real estate investments.
Florida’s tax policies proved to be a major factor influencing Bezos’ relocation decision. With no state income tax or a tax on capital gains, the move to Miami allowed Bezos to enjoy significant tax savings. By selling $2 billion of his Amazon shares, Bezos avoided paying approximately $140 million in state taxes that would have been due in Washington. However, the tax benefits do not end there.
The recent filing with the Securities and Exchange Commission (SEC) revealed Bezos’ plan to sell an additional 50 million shares before January 31, 2025. Given today’s stock price, this amounts to a staggering $8.7 billion. Considering Florida’s tax laws, Bezos stands to save at least $610 million in state taxes on the entirety of this sale alone. Furthermore, should the value of Amazon shares continue to rise, his tax savings will increase accordingly.
Bezos’ tax savings from the $2 billion stock sale already exceeded the cost of his 417-foot mega yacht, Koru. This extravagant purchase, worth $500 million, was largely financed by his Florida tax savings alone. In addition to the yacht, Bezos acquired two mansions in Indian Creek for $147 million. Reportedly, he is also considering purchasing three other properties on the island, home to notable residents such as Tom Brady and Carl Icahn. Brokers estimate that Bezos’ new estate, once constructed, could easily surpass $200 million in total costs.
Jeff Bezos’ relocation to Miami not only granted him proximity to family and his space ventures but also provided a tax-friendly environment that allowed him to maximize his wealth. By saving millions of dollars through the absence of state taxes, Bezos continues to expand his already vast empire of assets and investments. As Bezos closes one chapter in Seattle and embarks on a new chapter in Miami, his strategic tax planning serves as a reminder of the importance of assessing and optimizing tax situations for individuals in the highest echelons of wealth and power.
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