Twenty-seven states experienced a net gain in income tax filers from interstate migration between 2022 and 2023, but New Jersey was on the other end of the scale, losing more than 19,000 taxpayers during that period, according to the Tax Foundation’s analysis of IRS data.
States that gained the most new taxpayers due to interstate migration were Texas (+56,473), Florida (+55,359), North Carolina (+39,118), South Carolina (+29,214), Tennessee (+24,104); Arizona (+17,316), Georgia (+14,671), and Colorado (+11,341).
Among states that lost income tax filers due to interstate migration, only California (-100,397), New York (-71,987), and Illinois (-28,609), lost more filers than New Jersey (-19,370). Other states that lost a significant number of taxpayers due to outbound migration to other states include Massachusetts (-15,378), Maryland (-13,628), and Pennsylvania (-12,095).
“The 2022–2023 data confirm a clear negative relationship between top marginal individual income tax rates and net per capita migration,” said Abir Mandal, senior tax policy analyst for the Tax Foundation. “States with no individual income tax (Florida, Texas, Tennessee, Nevada, and others) consistently rank among the strongest gainers, while states with the highest top rates (California at 13.3%, New York at 10.9%, and New Jersey at 10.75% dominate the list of largest losers.”
Higher Income Residents Move to Lower Tax States
A particularly notable feature of the 2022–2023 migration patterns is the movement of higher-income residents. States with no income tax or lower overall tax burdens not only gained population but also attracted a disproportionate share of adjusted gross income.
Florida led with a $20.65 billion net AGI gain equivalent to roughly $184,771 per new resident. Texas, South Carolina, North Carolina, and Tennessee also recorded strong income inflows, with net AGI per new resident typically ranging from $49,000 to $70,000.
New Jersey had a net loss of $2.56 billion in AGI due to outbound migration to other states, which works out to a loss of $85,562 per departing resident, the Tax Foundation said. Among other states with high outmigration losses, Massachusetts lost $141,672 per departing resident; Illinois lost $110,618; New York lost $62,633; and California lost $59,440.
“This selective out-migration of higher earners significantly amplifies the fiscal impact: losing states forfeit far more revenue per person than the average resident, while gaining states receive a much stronger boost to their tax base,” Mandal said. “These trends suggest that tax competitiveness remains a critical factor for retaining and attracting high-income households, who contribute disproportionately to state tax revenues.”
The Tax Foundation noted that tax competitiveness alone does not entirely explain people’s decisions to move between states. South Carolina, for example, achieved the highest per capital inflow (a net gain of 59,102 residents and 29,214 tax returns) despite having a moderate 6% top state income tax rate. This indicates that other factors, such as climate, cost-of-living, and economic opportunity also contribute to outmigration decisions, the foundation said.
Nevertheless, the 2022-2023 IRS migration data overall show a strong correlation been tax policy and relocation decisions, especially among wealthier Americans.
“States that maintain competitive, low-burden tax systems continue to attract population and income, while those with higher and more complex tax structure experience sustained outflows,” Mandal said. “Policymakers seeking to bolster long-term economic growth would do well to consider these trends when evaluating tax reform options.”
To read the Tax Foundation’s analysis, go here.
